A Constant-Factor Approximation to Multidimensional Consumer Utility
TL;DR
This work studies mechanisms that maximize consumer utility for multiple unit-demand buyers and heterogeneous items whose values are drawn independently from known prior distributions and establishes a utility counterpart to the theory of simple, approximately revenue-optimal mechanisms.
Abstract
Motivated by social services where consumers pay with non-transferable ordeals, we study mechanisms that maximize consumer utility for multiple unit-demand buyers and heterogeneous items whose values are drawn independently from known prior distributions. Prior work in utility maximization approximates social welfare and shows that the gap between optimal utility and social welfare is logarithmic. We resolve the question of whether simple mechanisms can guarantee a constant-factor approximation to optimal utility itself. Our mechanisms achieve a $(5.67+\varepsilon)$-approximation for general independent values, improving to $2e/(e-1)<3.164$ when values are i.i.d. Each buyer chooses their favorite option from posted item prices or free item lotteries, and contention resolution determines which buyers'requests are served; this is BIC, ex-post individually rational, and computable in polynomial time. Our main technical contribution is a general upper bound on the optimal ex-ante-constrained utility that separates the contributions captured by posted prices and free lotteries. These results establish a utility counterpart to the theory of simple, approximately revenue-optimal mechanisms.