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Problem 14.3 This problem concerns combinatorial auctions (Ex- ample 7.2) where each bidder i has a unit-demand valuation v; (Ex- ercise 7.5). This means that

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Problem 14.3 This problem concerns combinatorial auctions (Ex- ample 7.2) where each bidder i has a unit-demand valuation v; (Ex- ercise 7.5). This means that there are values vil, . .., Vim such that vi(S) = maxjes vij for every subset S of items. Consider a payoff-maximization game in which each bidder i sub- mits one bid bij for each item j and each item is sold separately using a second-price single-item auction. Similarly to Problem 14.2(b), as- sume that each bid by lies between 0 and vij. The utility of a bidder is her value for the items won less her total payment. For exam- ple, if bidder i has values va and vi2 for two items, and wins both items when the second-highest bids are p1 and p2, then her utility is max {vil, vi2} - (P1 + p2). (a) (H) Prove that the POA of PNE in such a game can be at most (b) (H) Prove that the POA of CCE in every such game is at least

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