On Black-Box Transformations in Downward-Closed Environments

Abstract

Black-box transformations have been extensively studied in algorithmic mechanism design as a generic tool for converting algorithms into truthful mechanisms without degrading the approximation guarantees. While such transformations have been designed for a variety of settings, Chawla et al. showed that no fully general black-box transformation exists for single-parameter environments. In this paper, we investigate the potentials and limits of black-box transformations in the prior-free (i.e., non-Bayesian) setting in \emph{downward-closed} single-parameter environments, a large and important class of environments in mechanism design. On the positive side, we show that such a transformation can preserve a constant fraction of the welfare at every input if the private valuations of the agents take on a constant number of values that are far apart, while on the negative side, we show that this task is not possible for general private valuations.