Consensus estimate

Consensus estimate is a technique for designing truthful mechanisms in a prior-free mechanism design setting. The technique was introduced for digital goods auctions and later extended to more general settings.

Suppose there is a digital good that we want to sell to a group of buyers with unknown valuations. We want to determine the price that will bring us maximum profit. Suppose we have a function that, given the valuations of the buyers, tells us the maximum profit that we can make. We can use in in the following way: