The Computational Complexity of Truthfulness in Combinatorial Auctions

Abstract: One of the fundamental questions of Algorithmic Mechanism Design is whether there exists an inherent clash between truthfulness and computational tractability: in particular, whether polynomial-time truthful mechanisms for combinatorial auctions are provably weaker in terms of approximation ratio than non-truthful ones. This question was very recently answered for universally truthful mechanisms for combinatorial auctions \cite{D11}, and even for truthful-in-expectation mechanisms \cite{DughmiV11}. However, both of these results are based on information-theoretic arguments for valuations given by a value oracle, and leave open the possibility of polynomial-time truthful mechanisms for succinctly described classes of valuations. This paper is the first to prove {\em computational hardness} results for truthful mechanisms for combinatorial auctions with succinctly described valuations. We prove that there is a class of succinctly represented submodular valuations for which no deterministic truthful mechanism provides an $m<sup>{1/2-\epsilon}$-approximation for a constant $\epsilon&gt;0$, unless $NP=RP$ ($m$ denotes the number of items). Furthermore, we prove that even truthful-in-expectation mechanisms cannot approximate combinatorial auctions with certain succinctly described submodular valuations better than within $n<sup>\gamma$, where $n$ is the number of bidders and $\gamma&gt;0$ some absolute constant, unless $NP \subseteq P/poly$. In addition, we prove computational hardness results for two related problems.