On the Efficiency of Fair and Truthful Trade Mechanisms
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arXiv
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| Auteurs principaux: | , , |
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| Format: | Preprint |
| Publié: |
2025
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| _version_ | 1866916631010082816 |
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| author | Babaioff, Moshe Feng, Yiding Morag, Noam Manaker |
| author_facet | Babaioff, Moshe Feng, Yiding Morag, Noam Manaker |
| contents | We consider the impact of fairness requirements on the social efficiency of truthful mechanisms for trade, focusing on Bayesian bilateral-trade settings. Unlike the full information case in which all gains-from-trade can be realized and equally split between the two parties, in the private information setting, equitability has devastating welfare implications (even if only required to hold ex-ante). We thus search for an alternative fairness notion and suggest requiring the mechanism to be KS-fair: it must ex-ante equalize the fraction of the ideal utilities of the two traders. We show that there is always a KS-fair (simple) truthful mechanism with expected gains-from-trade that are half the optimum, but always ensuring any better fraction is impossible (even when the seller value is zero). We then restrict our attention to trade settings with a zero-value seller and a buyer with value distribution that is Regular or MHR, proving that much better fractions can be obtained under these conditions. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2502_19050 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | On the Efficiency of Fair and Truthful Trade Mechanisms Babaioff, Moshe Feng, Yiding Morag, Noam Manaker Computer Science and Game Theory We consider the impact of fairness requirements on the social efficiency of truthful mechanisms for trade, focusing on Bayesian bilateral-trade settings. Unlike the full information case in which all gains-from-trade can be realized and equally split between the two parties, in the private information setting, equitability has devastating welfare implications (even if only required to hold ex-ante). We thus search for an alternative fairness notion and suggest requiring the mechanism to be KS-fair: it must ex-ante equalize the fraction of the ideal utilities of the two traders. We show that there is always a KS-fair (simple) truthful mechanism with expected gains-from-trade that are half the optimum, but always ensuring any better fraction is impossible (even when the seller value is zero). We then restrict our attention to trade settings with a zero-value seller and a buyer with value distribution that is Regular or MHR, proving that much better fractions can be obtained under these conditions. |
| title | On the Efficiency of Fair and Truthful Trade Mechanisms |
| topic | Computer Science and Game Theory |
| url | https://arxiv.org/abs/2502.19050 |