Algorithmic Mechanism Design with Investment

Explore a 49-minute lecture on algorithmic mechanism design with investment, delivered by Paul Milgrom from Stanford University as part of the Online and Matching-Based Market Design series at the Simons Institute. Delve into the intricacies of approximation algorithms and their performance in allocation problems versus investment incentives. Discover why some algorithms that excel in optimal welfare allocation may fail when considering investment incentives. Examine the conditions under which an algorithm's allocative and investment guarantees align, focusing on the role of confirming negative externalities. Learn about newly introduced fast approximation algorithms for the knapsack problem that eliminate confirming negative externalities and offer near-optimal guarantees for both allocation and investment scenarios.