The Unit-Demand Envy-Free Pricing Problem
Abstract
We consider the unit-demand envy-free pricing problem, which is a unit-demand auction where each bidder receives an item that maximizes his utility, and the goal is to maximize the auctioneer's profit. This problem is NP-hard and unlikely to be in APX. We present four new MIP formulations for it and experimentally compare them to a previous one due to Shioda, Tun\c{c}el, and Myklebust. We describe three models to generate different random instances for general unit-demand auctions, that we designed for the computational experiments. Each model has a nice economic interpretation. Aiming approximation results, we consider the variant of the problem where the item prices are restricted to be chosen from a geometric series, and prove that an optimal solution for this variant has value that is a fraction (depending on the series used) of the optimal value of the original problem. So this variant is also unlikely to be in APX.
Keywords
Cite
@article{arxiv.1310.0038,
title = {The Unit-Demand Envy-Free Pricing Problem},
author = {Cristina G. Fernandes and Carlos E. Ferreira and Álvaro J. P. Franco and Rafael C. S. Schouery},
journal= {arXiv preprint arXiv:1310.0038},
year = {2013}
}