On the Power of Determinism in Multi-Item Auctions

Abstract

We study the classical multi-item monopoly setting with a single additive buyer and $m$ heterogeneous items whose values are independent but not necessarily identically distributed. Optimal truthful auctions may be randomized and complicated. We analyze the approximation ratios of three simple deterministic auctions: selling all items separately, selling them as a single grand bundle, and choosing the better of the two. Our technical cornerstone is a nonlinear mathematical programming formulation of the worst-case approximation ratio of selling separately, in discrete auctions where values lie in the grid $\{0,1/K,2/K,\dots ,1\}$. For two iid items, we construct novel tight Lagrangian dual certificates that determine this ratio exactly for any discretization parameter $K$. Taking $K\to\infty$, we obtain the tight bound $1+W(1/e)\approx 1.278$ in the continuous-valued setting, where $W$ denotes the Lambert-W function, closing the $[1.278,1.368]$ gap from the work of Hart and Nisan [EC'12, JET 2017]. For $m\geq2$ independent items, a different dual construction gives an upper bound on the approximation ratio of selling separately in terms of basic statistics of the item values. Combining this bound with new inequalities relating optimal revenue (REV), separate-selling revenue (SREV), and grand-bundle revenue (BREV), we derive improved guarantees for all three auctions. Most notably, we prove \[REV\leq 3.5 \max\{SREV,BREV\},\] improving upon the $5.2$ factor of Ma and Simchi-Levi [AISTATS'21] and the $6$ factor of Babaioff, Immorlica, Lucier and Weinberg [FOCS'14, JACM 2020]. For iid items, we also prove $REV\leq 4.4534 BREV$.