Optimal Multi-Item Auctions with I.I.D. Values

Abstract

We study revenue-maximizing multi-item auctions under dominant-strategy incentive compatibility (DSIC) and ex-post individual rationality. Buyers have additive valuations, and all item values are independent draws from a common finite distribution. For every two-point distribution and arbitrary numbers of buyers and items, we give an explicit deterministic mechanism that is optimal among all randomized mechanisms satisfying these requirements, together with a polynomial-time algorithm for computing the optimal expected revenue. For general finite-support distributions, computing the exact optimal revenue is $\#\mathrm P$-hard, both for a single buyer with an arbitrary number of items and for two items with an arbitrary number of buyers. For a single buyer, we also establish hardness of computing an optimal mechanism. Building on prior work, we also obtain exact and approximate algorithms under different parameter restrictions. Exact polynomial-time optimization is possible whenever any two of the buyer count, item count, and support size are fixed. When only the item count is fixed, a polynomial-time approximation scheme constructs a mechanism with expected revenue at least a $1-\varepsilon$ fraction of the optimum for every fixed $0<\varepsilon<1$. All these algorithms satisfy DSIC and ex-post individual rationality.