A Unifying Hierarchy of Valuations with Complements and Substitutes

We introduce a new hierarchy over monotone set functions, that we refer to as MPH (Maximum over Positive Hypergraphs). Levels of the hierarchy correspond to the degree of complementarity in a given function. The highest level of the hierarchy, MPH-m (where m is the total number of items) captures all monotone functions. The lowest level, MPH-1, captures all monotone submodular functions, and more generally, the class of functions known as XOS. Every monotone function that has a positive hypergraph representation of rank k (in the sense defined by Abraham, Babaioff, Dughmi and Roughgarden [EC 2012]) is in MPH-k. Every monotone function that has supermodular degree k (in the sense defined by Feige and Izsak [ITCS 2013]) is in MPH-(k+1). In both cases, the converse direction does not hold, even in an approximate sense. We present additional results that demonstrate the expressiveness power of MPH-k. One can obtain good approximation ratios for some natural optimization problems, provided that functions are required to lie in low levels of the MPH hierarchy. We present two such applications. One shows that the maximum welfare problem can be approximated within a ratio of k+1 if all players hold valuation functions in MPH-k. The other is an upper bound of 2k on the price of anarchy of simultaneous first price auctions. Being in MPH-k can be shown to involve two requirements -- one is monotonicity and the other is a certain requirement that we refer to as PLE (Positive Lower Envelope). Removing the monotonicity requirement, one obtains the PLE hierarchy over all non-negative set functions (whether monotone or not), which can be fertile ground for further research.