Renato Paes Leme
Renato Paes Leme is a research scientist at Google New York. He is broadly interested in algorithm design, specially for problems on the interface between Economics and Computation. Some topics he is particularly excited about are: mechanism design for non-quasi-linear settings, Price of Anarchy of auctions, sequential games and applications of game-theory to ad auctions. See http://renatoppl.com/ for my personal homepage.
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Procurement Auctions via Approximate Submodular Optimization
Amin Karbasi
Grigoris Velegkas
Forty-second International Conference on Machine Learning (2025)
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We study the problem of procurement auctions, in which an auctioneer seeks to acquire services from a group of strategic sellers with private costs. The quality of the services is measured through some \emph{submodular} function that is known to the auctioneer. Our goal is to design \emph{computationally efficient} procurement auctions that (approximately) maximize the difference between the quality of the acquired services and the total cost of the sellers, in a way that is incentive compatible (IC) and individual rational (IR) for the sellers, and generates non-negative surplus (NAS) for the auctioneer.
Leveraging recent results from the literature of \emph{non-positive} submodular function maximization, we design computationally efficient frameworks that transform submodular function optimization algorithms to \emph{mechanisms} that are IC and IR for the sellers, NAS for the auctioneer, and \emph{approximation-preserving}. Our frameworks are general and work both in the \emph{offline} setting where the auctioneer can observe the bids and the services of all the sellers simultaneously, and in the \emph{online} setting where the sellers arrive in an adversarial order and the auctioneer has to make an irrevocable decision whether to purchase their service or not. We further investigate whether it is possible to convert state-of-art submodular optimization algorithms into a descending auction. We focurs in the adversarial setting, meaning that the schedule of the descending prices is determined by an advesary. We show that a submodular optimization algorithm satisfying bi-criteria $(\alpha, 1)$-approximation in welfare can be effectively converted to a descending auction in the adversarial setting in if and only if $\alpha \leq \frac 1 2$. Our result highlights the importance of a carefully designed schedule of descending prices to effectively convert a submodular optimization algorithm satisfying bi-criteria $(\alpha, 1)$-approximation in welfare with $\alpha > \frac 1 2$ to a descending auction. We also further establish a connection between descending auctions and online submodular optimization algorithms.
We demonstrate the practical applications of our frameworks by instantiating them with different state-of-the-art submodular optimization algorithms and comparing their welfare performance through empirical experiments on publicly available datasets that consist of thousands of sellers.
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Data-Driven Mechanism Design: Jointly Eliciting Preferences and Information
Dirk Bergemann
Marek Bojko
Paul Duetting
Haifeng Xu
EC '25: Proceedings of the 26th ACM Conference on Economics and Computation (2025), pp. 507
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We study mechanism design when agents have private preferences and private information about a common payoff-relevant state. We show that standard message-driven mechanisms cannot implement socially efficient allocations when agents have multidimensional types, even under favorable conditions.
To overcome this limitation, we propose data-driven mechanisms that leverage additional post-allocation information, modeled as an estimator of the payoff-relevant state. Our data-driven mechanisms extend the classic Vickrey-Clarke-Groves class. We show that they achieve exact implementation in posterior equilibrium when the state is either fully revealed or the utility is affine in an unbiased estimator. We also show that they achieve approximate implementation with a consistent estimator, converging to exact implementation as the estimator converges, and present bounds on the convergence rate.
We demonstrate applications to digital advertising auctions and large language model (LLM)-based mechanisms, where user engagement naturally reveals relevant information.
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Auto-bidding and Auctions in Online Advertising: A Survey
Ashwinkumar Badanidiyuru Varadaraja
Christopher Liaw
Haihao (Sean) Lu
Andres Perlroth
Georgios Piliouras
Ariel Schvartzman
Kelly Spendlove
Hanrui Zhang
Mingfei Zhao
ACM SIGecom Exchanges, 22 (2024)
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In this survey, we summarize recent developments in research fueled by the growing adoption of automated bidding strategies in online advertising. We explore the challenges and opportunities that have arisen as markets embrace this autobidding and cover a range of topics in this area, including bidding algorithms, equilibrium analysis and efficiency of common auction formats, and optimal auction design.
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Mechanism Design for Large Language Models
Paul Duetting
Haifeng Xu
Proceedings of the ACM on Web Conference 2024, Association for Computing Machinery, New York, NY, USA, 144–155
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We investigate auction mechanisms for AI-generated content, focusing on applications like ad creative generation. In our model, agents' preferences over stochastically generated content are encoded as large language models (LLMs). We propose an auction format that operates on a token-by-token basis, and allows LLM agents to influence content creation through single dimensional bids. We formulate two desirable incentive properties and prove their equivalence to a monotonicity condition on output aggregation. This equivalence enables a second-price rule design, even absent explicit agent valuation functions. Our design is supported by demonstrations on a publicly available LLM.
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Complex Dynamics in Autobidding Systems
Georgios Piliouras
Kelly Spendlove
Proceedings of the 25th ACM Conference on Economics and Computation (2024)
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It has become the default in markets such as ad auctions for participants to bid in an auction through automated bidding agents (autobidders) which adjust bids over time to satisfy return-over-spend constraints. Despite the prominence of such systems for the internet economy, their resulting dynamical behavior is still not well understood. Although one might hope that such relatively simple systems would typically converge to the equilibria of their underlying auctions, we provide a plethora of results that show the emergence of complex behavior, such as bi-stability, periodic orbits and quasi periodicity. We empirically observe how the market structure (expressed as motifs) qualitatively affects the behavior of the dynamics. We complement it with theoretical results showing that autobidding systems can simulate both linear dynamical systems as well logical boolean gates.
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Calibrated Click-Through Auctions
Dirk Bergemann
Paul Duetting
Proceedings of the ACM Web Conference 2022, pp. 47-57
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We analyze the optimal information design in a click-through auction with stochastic click-through rates and known valuations per click. The auctioneer takes as given the auction rule of the click-through auction, namely the generalized second-price auction. Yet, the auctioneer can design the information flow regarding the click-through rates among the bidders. We require that the information structure to be calibrated in the learning sense. With this constraint, the auction needs to rank the ads by a product of the value and a calibrated prediction of the click-through rates. The task of designing an optimal information structure is thus reduced to the task of designing an optimal calibrated prediction.
We show that in a symmetric setting with uncertainty about the click-through rates, the optimal information structure attains both social efficiency and surplus extraction. The optimal information structure requires private (rather than public) signals to the bidders. It also requires correlated (rather than independent) signals, even when the underlying uncertainty regarding the click-through rates is independent. Beyond symmetric settings, we show that the optimal information structure requires partial information disclosure, and achieves only partial surplus extraction.
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Contextual Recommendations and Low-Regret Cutting-Plane Algorithms
Guru Prashanth Guruganesh
NeurIPS (2021)
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We consider the following variant of contextual linear bandits motivated by routing applications in navigational engines and recommendation systems. We wish to learn a hidden $d$-dimensional value $w^*$. Every round, we are presented with a subset $\mathcal{X}_t \subseteq \mathbb{R}^d$ of possible actions. If we choose (i.e. recommend to the user) action $x_t$, we obtain utility $\langle x_t, w^* \rangle$ but only learn the identity of the best action $\arg\max_{x \in \X_t} \langle x, w^* \rangle$.
We design algorithms for this problem which achieve regret $O(d\log T)$ and $\exp(O(d \log d))$. To accomplish this, we design novel cutting-plane algorithms with low “regret” -- the total distance between the true point $w^*$ and the hyperplanes the separation oracle returns.
We also consider the variant where we are allowed to provide a list of several recommendations. In this variant, we give an algorithm with $O(d^2 \log d)$ regret and list size $\poly(d)$. Finally, we construct nearly tight algorithms for a weaker variant of this problem where the learner only learns the identity of an action that is better than the recommendation. Our results rely on new algorithmic techniques in convex geometry (including a variant of Steiner’s formula for the centroid of a convex set) which may be of independent interest.
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In the Learning to Price setting, a seller posts prices over time with the goal of maximizing revenue while learning the buyer's valuation. This problem is very well understood when values are stationary (fixed or iid). Here we study the problem where the buyer's value is a moving target, i.e., they change over time either by a stochastic process or adversarially with bounded variation. In either case, we provide matching upper and lower bounds on the optimal revenue loss. Since the target is moving, any information learned soon becomes out-dated, which forces the algorithms to keep switching between exploring and exploiting phases.
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In the contextual pricing problem a seller repeatedly obtains products described by an adversarially chosen feature vector in $\R^d$ and only observes the purchasing decisions of a buyer with a fixed but unknown linear valuation over the products. The regret measures the difference between the revenue the seller could have obtained knowing the buyer valuation and what can be obtained by the learning algorithm.
We give a poly-time algorithm for contextual pricing with $O(d \log \log T + d \log d)$ regret which matches the $\Omega(d \log \log T)$ lower bound up to the $d \log d$ additive factor. If we replace pricing loss by the symmetric loss, we obtain an algorithm with nearly optimal regret of $O(d \log d)$ matching the $\Omega(d)$ lower bound up to $\log d$. These algorithms are based on a novel technique of bounding the value of the Steiner polynomial of a convex region at various scales. The Steiner polynomial is a degree $d$ polynomial with intrinsic volumes as the coefficients.
We also study a generalized version of contextual search where the hidden linear function over the Euclidean space is replaced by a hidden function $f : \X \rightarrow \Y$ in a certain hypothesis class $\H$. We provide a generic algorithm with $O(d^2)$ regret where $d$ is the covering dimension of this class. This leads in particular to a $\tilde{O}(s^2)$ regret algorithm for linear contextual search if the linear function is guaranteed to be $s$-sparse. Finally we also extend our results to the noisy feedback model, where each round our feedback is flipped with a fixed probability $p < 1/2$.
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Secretaries with Advice
Paul Duetting
Proceedings of the 22nd ACM Conference on Economics and Computation (EC'21) (2021), pp. 409-429
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The secretary problem is probably the purest model of decision making under uncertainty. In this
paper we ask which advice can we give the algorithm to improve its success probability?
We propose a general model that unifies a broad range of problems: from the classic secretary problem
with no advice, to the variant where the quality of a secretary is drawn from a known distribution and
the algorithm learns each candidate’s quality quantile on arrival, to more modern ML-based versions of
advice where a binary classifier gives us noisy advice about whether or not the current secretary is the
best on the market.
Our main technique is a factor revealing LP that captures all of the problems above. We use this LP
formulation to gain structural insight into the optimal policy and present two case studies: a re-derivation
of the classic known distributions result with tools from linear programming and a tight analysis of the
noisy binary advice model.
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