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ACM Meas. Anal. Comput. Syst."],"published-print":{"date-parts":[[2020,5,27]]},"abstract":"<jats:p>Motivated by the growing prominence of third-party data providers in online marketplaces, this paper studies the impact of the presence of third-party data providers on mechanism design. When no data provider is present, it has been shown that simple mechanisms are \"good enough'' -- they can achieve a constant fraction of the revenue of optimal mechanisms. The results in this paper demonstrate that this is no longer true in the presence of a third-party data provider who can provide the bidder with a signal that is correlated with the item type. Specifically, even with a single seller, a single bidder, and a single item of uncertain type for sale, the strategies of pricing each item-type separately (the analog of item pricing for multi-item auctions) and bundling all item-types under a single price (the analog of grand bundling) can both simultaneously be a logarithmic factor worse than the optimal revenue. Further, in the presence of a data provider, item-type partitioning mechanisms---a more general class of mechanisms which divide item-types into disjoint groups and offer prices for each group---still cannot achieve within a $\u0142og \u0142og$ factor of the optimal revenue. Thus, our results highlight that the presence of a data-provider forces the use of more complicated mechanisms in order to achieve a constant fraction of the optimal revenue.<\/jats:p>","DOI":"10.1145\/3379478","type":"journal-article","created":{"date-parts":[[2020,5,28]],"date-time":"2020-05-28T04:29:21Z","timestamp":1590640161000},"page":"1-31","update-policy":"https:\/\/doi.org\/10.1145\/crossmark-policy","source":"Crossref","is-referenced-by-count":2,"title":["Third-Party Data Providers Ruin Simple Mechanisms"],"prefix":"10.1145","volume":"4","author":[{"given":"Yang","family":"Cai","sequence":"first","affiliation":[{"name":"Yale University, New Haven, CT, USA"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Federico","family":"Echenique","sequence":"additional","affiliation":[{"name":"California Institute of Technology, Pasadena, CA, USA"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Hu","family":"Fu","sequence":"additional","affiliation":[{"name":"University of British Columbia, Vancouver, BC, Canada"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Katrina","family":"Ligett","sequence":"additional","affiliation":[{"name":"Hebrew University of Jerusalem, Jerusalem, Israel"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Adam","family":"Wierman","sequence":"additional","affiliation":[{"name":"California Institute of Technology, Pasadena, CA, USA"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Juba","family":"Ziani","sequence":"additional","affiliation":[{"name":"University of Pennsylvania, Philadelphia, PA, USA"}],"role":[{"role":"author","vocabulary":"crossref"}]}],"member":"320","published-online":{"date-parts":[[2020,5,27]]},"reference":[{"key":"e_1_2_1_1_1","doi-asserted-by":"publisher","DOI":"10.1109\/FOCS.2014.11"},{"key":"e_1_2_1_2_1","volume-title":"Algorithms-ESA 2015","author":"Bateni MohammadHossein","unstructured":"MohammadHossein Bateni , Sina Dehghani , MohammadTaghi Hajiaghayi , and Saeed Seddighin . 2015. 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