TY - GEN
T1 - Screening with Limited Information
T2 - 17th International Conference on Web and Internet Economics (WINE 2021)
AU - Chen, Zhi
AU - Hu, Zhenyu
AU - Wang, Ruiqin
PY - 2021/12
Y1 - 2021/12
N2 - A seller seeks a selling mechanism to maximize the worst-case revenue obtained from a buyer whose valuation distribution lies in a certain ambiguity set. For a generic convex ambiguity set, we show via the minimax theorem that strong duality holds between the problem of finding the optimal robust mechanism and a minimax pricing problem where the adversary first chooses a worst-case distribution and then the seller decides the best posted price mechanism. This observation connects prior literature that separately studies the primal (robust mechanism design) and problems related to the dual (e.g., robust pricing, buyer-optimal pricing and personalized pricing). We provide a geometric approach to analytically solving the minimax pricing problem (and the robust pricing problem) for several important ambiguity sets such as the ones with mean and various dispersion measures, and with the Wasserstein metric. The solutions are then used to construct the optimal robust mechanism and to compare with the solutions to the robust pricing problem.
AB - A seller seeks a selling mechanism to maximize the worst-case revenue obtained from a buyer whose valuation distribution lies in a certain ambiguity set. For a generic convex ambiguity set, we show via the minimax theorem that strong duality holds between the problem of finding the optimal robust mechanism and a minimax pricing problem where the adversary first chooses a worst-case distribution and then the seller decides the best posted price mechanism. This observation connects prior literature that separately studies the primal (robust mechanism design) and problems related to the dual (e.g., robust pricing, buyer-optimal pricing and personalized pricing). We provide a geometric approach to analytically solving the minimax pricing problem (and the robust pricing problem) for several important ambiguity sets such as the ones with mean and various dispersion measures, and with the Wasserstein metric. The solutions are then used to construct the optimal robust mechanism and to compare with the solutions to the robust pricing problem.
KW - Robust mechanism design
KW - Moment condition
KW - Mean-preserving contraction
KW - Wasserstein metric
UR - http://gateway.isiknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcAuth=LinksAMR&SrcApp=PARTNER_APP&DestLinkType=FullRecord&DestApp=WOS&KeyUT=000766201000035
UR - https://link.springer.com/book/10.1007/978-3-030-94676-0?page=2&oscar-books=true#about-book-content
U2 - 10.2139/ssrn.3940212
DO - 10.2139/ssrn.3940212
M3 - 32_Refereed conference paper (with host publication)
SN - 978-3-030-94675-3
T3 - Lecture Notes in Computer Science
SP - 549
BT - Web and Internet Economics
A2 - Feldman, Michal
A2 - Fu, Hu
A2 - Talgam-Cohen, Inbal
PB - Springer, Cham
Y2 - 14 December 2021 through 17 December 2021
ER -