# Welfare Maximization with Limited Interaction: Information and Communication in Economics

We continue the study of welfare maximization in unit-demand (matching) markets, in a distributed information model where agent?s valuations are unknown to the central planner, and therefore communication is required to determine an efficient allocation. Dobzinski, Nisan and Oren (STOC?14) showed that if the market size is n, then r rounds of interaction (with logarithmic bandwidth) suffice to obtain an n^{1/(r+1)}-approximation to the optimal social welfare. In particular, this implies that such markets converge to a stable state (constant approximation) in time logarithmic in the market size.

We obtain the first multi-round lower bound for this setup. We show that even if the allowable per- round bandwidth of each agent is n?(r), the approximation ratio of any r-round (randomized) protocol is no better than ?(n^{1/5^{r+1}}, implying an ?(log log n) lower bound on the rate of convergence of the market to equilibrium.

Our construction and techniques may be of interest to round-communication tradeoffs in the more general setting of combinatorial auctions, for which the only known lower bound is for simultaneous (r = 1) protocols [DNO14].