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:''"VCG" redirects here. For the heartbeat recording method see [[Vectorcardiography]].''
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In [[auction theory]], a '''Vickrey–Clarke–Groves (VCG) auction''' of multiple goods is a [[Sealed-bid auction|sealed-bid]] [[auction]] wherein bidders report their valuations for the items. The auction system assigns the items in a [[socially optimal]] manner.  This system charges each individual the harm they cause to other bidders,<ref>{{cite web | last = von Ahn | first = Luis | authorlink = Luis von Ahn | coauthors =  | title = Sponsored Search | work = 15–396: Science of the Web Course Notes | publisher = Carnegie Mellon University | date = 2008-10-07 | url = http://scienceoftheweb.org/15-396/lectures/lecture11.pdf | format = PDF | doi = | accessdate = 2008-11-05}}</ref> and ensures that the optimal strategy for a bidder is to bid the true valuations of the objects. It is a generalization of a [[Vickrey auction]] for multiple items.
 
The auction is named after [[William Vickrey]],<ref>{{cite journal | title=Counterspeculation, Auctions, and Competitive Sealed Tenders | author=Vickrey, William | journal=The Journal of Finance | year=1961 | volume=16 | issue=1 | pages=8–37 | doi=10.1111/j.1540-6261.1961.tb02789.x}}</ref> [[Edward H. Clarke]],<ref>{{cite journal|author=Clarke, E. | year=1971 | title=Multipart Pricing of Public Goods | journal=Public Choice | volume=11 | issue=1 | pages=17–33}}</ref> and [[Theodore Groves]]<ref>{{cite journal | title=Incentives in Teams | author=Groves, T. | journal=Econometrica | year=1973 | volume=41 | issue=4 | pages=617–631}}</ref> for their papers that successively generalized the idea.
{{technical|date=December 2013}}
== Formal description==
For any set of auctioned items <math>M = \{t_1,\ldots,t_m\}</math> and a set of bidders <math>N = \{b_1,\ldots,b_n\}</math>, let <math>V^M_N</math> be the social value of the VCG auction for a given bid-combination. A bidder <math>b_i</math> who wins an item <math>t_j</math> pays <math>V^{M}_{N \setminus \{b_i\}}-V^{M \setminus \{t_j\}}_{N \setminus \{b_i\}}</math>, which is the social cost of his winning that is incurred by the rest of the agents
 
Indeed, the set of bidders other than <math>b_i</math> is <math>N \setminus \{b_i\}</math>. When item <math>t_j</math> is available, they could attain welfare <math>V^{M}_{N \setminus \{b_i\}}.</math>  The winning of the item by <math>b_i</math> reduces the set of available items to <math>M \setminus \{t_j\}</math>, however, so that the attainable welfare is now <math>V^{M \setminus \{t_j\}}_{N \setminus \{b_i\}}</math>.  The difference between the two levels of welfare is the payment for <math>t_j</math>  paid by the winning bidder <math>b_i</math>.
 
The winning bidder who has value <math>A</math> for the item <math>t_j</math> derives therefore utility <math>A - \left(V^{M}_{N \setminus \{b_i\}}-V^{M \setminus \{t_j\}}_{N \setminus \{b_i\}}\right).</math>
 
==Examples==
 
===Example #1===
See the example with apples in the [[Vickrey_Auction#Generalizations|Generalization]] section of Vickrey Auction.
===Example #2===
Assume that there are two bidders, <math>b_1</math> and <math>b_2</math>, two items, <math>t_1</math> and <math>t_2</math>, and each bidder is allowed to obtain one item.  We let <math>v_{i,j}</math> be bidder <math>b_i</math>'s valuation for item <math>t_j</math>. Assume <math>v_{1,1} = 10</math>, <math>v_{1,2} = 5</math>, <math>v_{2,1} = 5</math>, and <math>v_{2,2} = 3</math>.  We see that both <math>b_1</math> and <math>b_2</math> would prefer to receive item <math>t_1</math>; however, the socially optimal assignment gives item <math>t_1</math> to bidder <math>b_1</math> (so his achieved value is <math>10</math>) and item <math>t_2</math> to bidder <math>b_2</math> (so his achieved value is <math>3</math>). Hence, the total achieved value is <math>13</math>, which is optimal.
 
If person <math>b_2</math> were not in the auction, person <math>b_1</math> would still be assigned to <math>t_1</math>, and hence person <math>b_1</math> can gain nothing. The current outcome is <math>10</math> hence <math>b_2</math> is charged <math>10-10=0</math>.
 
If person <math>b_1</math> were not in the auction, <math>t_1</math> would be assigned to <math>b_2</math>, and would have valuation <math>5</math>.  The current outcome is 3 hence <math>b_1</math> is charged <math>5-3=2</math>.
 
===Example #3===
Here we will look at a multiple item auction. Consider the situation when there are <math>n</math> bidders, <math>n</math> houses, and values <math>\tilde v_{ij}</math>, representing
the value player <math>i</math> has for house <math>j</math>. Possible outcomes in this auction are characterized by [[Matching (graph theory)|bipartite matchings]], pairing houses with people.
If we know the values, then maximizing social welfare reduces to computing a maximum weight bipartite matching.
 
If we do not know the values, then we instead solicit bids <math>\tilde b_{ij}</math>, asking each player <math>i</math> how much he would wish to bid for house <math>j</math>.
Define <math>b_i(a) = \tilde b_{ik}</math> if bidder <math>i</math> receives house <math>k</math> in the matching <math>a</math>. Now compute <math>a^*</math>, a maximum weight
bipartite matching with respect to the bids, and compute
 
: <math>p_i = \left[ \max_{a \in A} \sum_{j \neq i} b_j(a) \right] - \sum_{j \neq i} b_j(a^*) </math>.
 
The first term is another max weight bipartite matching, and the second term can be computed easily from <math>a^*</math>.
 
==Optimality of Truthful Bidding==
The following is a proof that bidding one's true valuations for the auctioned items is optimal<ref>{{cite web
  | last = von Ahn
  | first = Luis
  | authorlink = Luis von Ahn
  | coauthors =
  | title = Assignment 5 Solutions
  | work = 15–396: Science of the Web Published Solutions
  | publisher = Carnegie Mellon University
  | date = 2008-10-07
  | url = http://www.scienceoftheweb.org/15-396/assignments/assignment5_solutions.pdf
  | format = PDF
  | doi =
  | accessdate = 2008-11-05}}</ref>
 
For each bidder <math>b_i</math>, let <math>v_i</math>  be his true valuation of an item <math>t_i</math>, and suppose ([[without loss of generality]]) that <math>b_1</math> wins <math>t_1</math> upon submitting his true valuations.
 
Note that the size bid of <math>b_1</math> has no effect on his utility as long as he wins the item (see the utility function above).   Hence, we assume that <math>b_1</math> does not bid truthfully, and receives item <math>t_j</math> because of his non-truthful bidding. In the truthful bidding case, <math>b_1</math> has total utility <math>U_1 = v_1-\left(V^{M}_{N \setminus \{b_1\}}-V^{M \setminus \{t_1\}}_{N \setminus \{b_1\}}\right)</math>. In the untruthful bidding case, <math>b_1</math> has total utility <math>U_2 = v_j-\left(V^{M}_{N \setminus \{b_1\}}-V^{M \setminus \{t_j\}}_{N \setminus \{b_1\}}\right)</math>. Hence, we must prove that <math>U_1 - U_2 \geq 0</math>, which shows that the utility received from truthful bidding is always at least that received from untruthful bidding.
 
: <math>U_1 - U_2 = v_1 - \left(V^{M}_{N \setminus \{b_1\}} - V^{M \setminus \{t_1\}}_{N \setminus \{b_1\}}\right) - v_j + \left(V^{M}_{N \setminus \{b_1\}}-V^{M \setminus \{t_j\}}_{N \setminus \{b_1\}}\right) = \left[v_1 + V^{M \setminus \{t_1\}}_{N \setminus \{b_1\}}\right] - \left[v_j + V^{M \setminus \{t_j\}}_{N \setminus \{b_1\}}\right] </math>
 
However, the first term there is the maximum total social value achieved when <math>b_1</math> received <math>t_1</math>, and the second term there is the maximum total social value achieved when <math>b_1</math> received <math>t_j</math>.  However, we assumed that the VCG auction gave <math>b_1</math> item <math>t_1</math>; hence, the first term must be greater, and <math>U_1 - U_2 \geq 0</math>.
 
==More general setting==
 
We can consider a more general setting<ref>Nisan, Roughgarden, Tardos and Vazirani, '''Algorithmic Game Theory''', Cambridge, 2007</ref> of the VCG mechanism. Consider a set <math>A</math> of possible outcomes and <math>n</math> bidders which have different valuations for each outcome. This can be expressed as, function
 
: <math>v_i : A \longrightarrow R_+</math>
 
for each bidder <math>i</math> which expresses the value it has for each alternative. In this auction, each bidder will submit his valuation and the VCG mechanism will choose the alternative <math>a \in A </math> that maximizes <math> \sum_i v_i(a)</math> and charge prices <math>p_i</math> given by:
 
: <math>p_i = h_i(v_{-i}) - \sum_{j \neq i} v_j(a)</math>
 
where  <math>v_{-i} = (v_1, \dots, v_{i-1}, v_{i+1}, \dots, v_n)</math>, that is, <math>h_i</math> is a function that only depends on the valuation of the other players. This alone gives a   [[Mechanism design#Direct truthful mechanisms|truthful mechanism]], that is, a mechanism where bidding the true valuation is a [[dominant strategy]].
 
We could take, for example, <math>h_i(v_{-i}) = 0</math>, but we would have all prices negative, which might not be desirable.  We would rather prefer that players give money to the mechanism than the other way around.  The function:
 
: <math>h_i(v_{-i}) = \max_{b \in A} \sum_{j \neq i} v_j(b)</math>
 
is called ''Clarke pivot rule''.  
 
On the other hand, if we do not know the values <math>v_i</math>, we can solicit bids <math>b_i : A \longrightarrow R_+</math>. The mechanism
then chooses <math>a^*</math> maximizing the revenue <math>\sum_i b_i(a^*)</math>, treating the bids like the values. We then set
 
: <math>p_i = \left[ \max_{a \in A} \sum_{j \neq i} b_j(a) \right] - \sum_{j \neq i} b_j(a^*).</math>
 
Intuitively, the mechanism charges player <math>i</math> his ''externality'', or the decrease in optimal social welfare when he is included in the auction.
 
The Clark pivot rule has some very good properties as:
 
* it is individually rational, i.e., <math>v_i (a) - p_i \geq 0</math>. It means that all the players are getting positive utility by participating in the auction. No one is forced to bid.
 
* it has no positive transfers, i.e., <math>p_i \geq 0</math>. The mechanism does not need to pay anything to the bidders.
 
==See also==
*[[Preference revelation]]
 
==References==
{{reflist}}
 
{{DEFAULTSORT:Vickrey-Clarke-Groves Auction}}
[[Category:Game theory]]
[[Category:Mechanism design]]
[[Category:Auctioneering]]

Latest revision as of 16:42, 5 January 2015

Meditation, Yoga, and Qigong are all excellent for you to improve your overall health and start integrating basic breathing and relaxation practices into your own.

The neatest thing that the patients could do to overcome their social phobia should be to gradually expose themselves for you to some group consumers. They can start by talking together with small group, then move to a bigger group, following to an audience. It is always much better to give it a individuals go out of their shell than simply stay shy all their lives. Clothing easy on but end up being worth a go to take away the disorder within lives.

There is not a real approach to tell ensure that you is gonna be be info about the subject method for you. Let us face it; you are certainly going to think this isn't the right method for you, but you might be right, so always explore the likewise.

Eventually my extreme shyness blossomed into full-blown online therapist for the treatment of social anxiety disorder (youtube.com) with real panic attempts. I was scared nearly to death and feeling as if my life was completely out of control. Certainly I sought help immediately, and during the period of several years had lots of therapy and tried a lot of different medications. I see now that the majority of what Received from my doctors was detrimental to my recovery.

Contrast this with another common ailment, panic disorder may enjoy being around others, and conversation is often very manageable. But out of the blue, realize have shortness of breath, dizziness, faintness, trembling, increased heart rate and cold and hot flashes. The sufferer might think they will do die, but possess told that nobody has ever died directly from such a panic attack. This is important: panic attacks are not physically hurtful in virtually all cases (unless there can be a history of heart damage to example). Stick to person has gotten some unexpected panic attacks, they can be cultivated a anxiety about having future attacks. That's known as agoraphobia.

If you suspect that you may have anxiety, but aren't positive, looking at this may make it easier to. This test might help you self diagnosis no matter whether you have anxiety. If you do have anxiety seek proper care. Ask yourself the following yes or no challenges.

Change doesn't happen immediately. You have fallen into a habit and it should be replace having a brand new routine; an ideal habit. Using a people, it should take twenty-one days to instill a tendency. After twenty one days, whatever it is that an individual doing will your newest ritual. Further down are a pair things in order to can do to get you for the path conquer this concern.

The Victim is with respect to the worst self-image available to us bar stools on sale archetypes stored away in our subconscious heads. As an archetype, the Victim represents a self-perpetuating, self-destructive emotional and behavioral pattern so deeply ingrained in our subconscious that will continue to live it out daily until we rewrite the subconscious script. The subconscious creates autopilot; it is the pattern that repeats itself out of habit because we tacitly allow so it.