Supply-Limiting Mechanisms
 
Most results in revenue-maximizing auction design hinge on .getting the price right. . offering goods to bidders at a price low enough to encourage a sale, but high enough to garner non-trivial revenue. Getting the price right can be hard work, especially when the seller has little or no a priori information about bidders. valuations.
 
A simple alternative approach is to .let the market do the work., and have prices emerge from competition for scarce goods. The simplest-imaginable implementation of this idea is the following: first, if necessary, impose an artificial limit on the number of goods that can be sold; second, run the welfare-maximizing VCG mechanism subject to this imit.
 
We prove that such .supply-limiting mechanisms. achieve near-optimal expected revenue in a range of single- and multi-parameter Bayesian settings. Indeed, despite their simplicity, we prove that they essentially match the state-of-the-art in prior-independent mechanism design.
 
Joint work with Tim Roughgarden and Qiqi Yan.