TY - GEN
T1 - Achieving allocatively-efficient and strongly budget-balanced mechanisms in the network flow domain for bounded-rational agents
AU - Bachrach, Yoram
AU - Rosenschein, Jeffrey S.
PY - 2006
Y1 - 2006
N2 - Vickrey-Clarke-Groves (VCG) mechanisms are a well-known framework for finding a solution to a distributed optimization problem in systems of self-interested agents. VCG mechanisms have received wide attention in the AI community because they are efficient and strategy-proof; a special case of the Groves family of mechanisms, VCG mechanisms are the only direct-revelation mechanisms that are allocatively efficient and strategy-proof. Unfortunately, VCG mechanisms are only weakly budget-balanced. We consider self-interested agents in a network flow domain, and show that in this domain, it is possible to design a mechanism that is both allocatively-efficient and almost completely budget-balanced. This is done by choosing a mechanism that is not strategy-proof but rather strategy-resistant. Instead of using the VCG mechanism, we propose a mechanism in which finding the most beneficial manipulation is an NP-complete problem, and the payments from the agents to the mechanism may be minimized as much as desired. This way, the mechanism is virtually strongly budget-balanced: for any ε > 0, we find a mechanism that is ε-budget-balanced.
AB - Vickrey-Clarke-Groves (VCG) mechanisms are a well-known framework for finding a solution to a distributed optimization problem in systems of self-interested agents. VCG mechanisms have received wide attention in the AI community because they are efficient and strategy-proof; a special case of the Groves family of mechanisms, VCG mechanisms are the only direct-revelation mechanisms that are allocatively efficient and strategy-proof. Unfortunately, VCG mechanisms are only weakly budget-balanced. We consider self-interested agents in a network flow domain, and show that in this domain, it is possible to design a mechanism that is both allocatively-efficient and almost completely budget-balanced. This is done by choosing a mechanism that is not strategy-proof but rather strategy-resistant. Instead of using the VCG mechanism, we propose a mechanism in which finding the most beneficial manipulation is an NP-complete problem, and the payments from the agents to the mechanism may be minimized as much as desired. This way, the mechanism is virtually strongly budget-balanced: for any ε > 0, we find a mechanism that is ε-budget-balanced.
UR - http://www.scopus.com/inward/record.url?scp=33845195278&partnerID=8YFLogxK
U2 - 10.1007/11888727_6
DO - 10.1007/11888727_6
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AN - SCOPUS:33845195278
SN - 3540462422
SN - 9783540462422
T3 - Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
SP - 71
EP - 84
BT - Agent-Mediated Elect. Commerce. Design. Trading Agents and Mechanisms - AAMAS 2005 Workshop, AMEC 2005, and IJCAI 2005 Workshop, TADA 2005, Selected and Revised Papers
PB - Springer Verlag
T2 - AAMAS 2005 Workshop on Agent-Mediated Electronic Commerce, AMEC 2005 and IJCAI 2005 Workshop on Trading Agent Design and Analysis, TADA 2005
Y2 - 1 August 2005 through 1 August 2005
ER -