  This paper studies multi-unit auctions powered by intermediaries, where each
intermediary owns a private set of unit-demand buyers and all intermediaries
are networked with each other. Our goal is to incentivize the intermediaries to
diffuse the auction information to individuals they can reach, including their
private buyers and neighboring intermediaries, so that more potential buyers
are able to participate in the auction. To this end, we build a diffusion-based
auction framework which incorporates the strategic interaction of
intermediaries. It is showed that the classic Vickrey-Clarke-Groves (VCG)
mechanism within the framework can achieve the maximum social welfare, but it
may decrease the seller's revenue or even lead to a deficit. To overcome the
revenue issue, we propose a novel auction, called critical neighborhood
auction, which not only maximizes the social welfare, but also improves the
seller's revenue comparing to the VCG mechanism with/without intermediaries.
