It does matter who i sell to and whom i buy from: weighted bilateral VCG

There are special markets where not all buyers are symmetric from the seller's perspective and similarly, there are cases where not all sellers are symmetric from the buyer's perspective. For example when a person attempts to acquire some information it most definitely matters who the information provider/seller is. The higher the reputation an information provider has the more valuable his information is from the advertisers' perspective. The main challenges in such scenarios are the ability to (i) elicit true information from the participants, and (ii) find the most efficient allocation. The VCG could have been a good mechanism for this purpose, however, it is not budget balanced, making it impractical. In this paper we propose the weighted bilateral VCG mechanism which comprises most of the desired economic properties for being strategy proof, and individually rational. Moreover, our mechanism has been shown to be (i) budget balanced for the long term, (ii) does not add complexity overhead to the optimization problem complexity, (iii) may be tuned by the auctioneer using the weight parameter to decide about the level of profit it decides on, and (iv) produces suboptimal allocations which are very close to the optimal ones.