Date of Original Version
Abstract or Description
The Myerson-Satterthwaite theorem is a foundational impossibility result in mechanism design which states that no mechanism can be Bayes-Nash
incentive compatible, individually rational, and not run a deﬁcit. It holds universally for priors that are continuous, gapless, and overlapping. Using automated mechanism design, we investigate how often the impossibility occurs over discrete valuation domains. While the impossibility appears to hold generally for settings with large numbers of possible valuations (approaching the continuous case), domains with realistic valuation structure circumvent the impossibility with surprising frequency. Even if the impossibility applies, the amount of subsidy required to achieve individual rationality and incentive compatibility is relatively small, even over large unstructured domains.
Proceedings of the International Joint Conference on Artificial Intelligence (IJCAI).