Achieving allocatively-efficient and strongly budget-balanced mechanisms in the network flow domain for bounded-rational agents

Yoram Bachrach, Jeffrey S. Rosenschein

Research output: Contribution to journalConference articlepeer-review

2 Scopus citations

Abstract

Vickrey-Clarke-Groves (VCG) mechanisms are a 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, they 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 a beneficial manipulation is an NP-complete problem, and the payments from the agents to the mechanism may be minimized as much as desired.

Original languageAmerican English
Pages (from-to)1653-1654
Number of pages2
JournalIJCAI International Joint Conference on Artificial Intelligence
StatePublished - 2005
Event19th International Joint Conference on Artificial Intelligence, IJCAI 2005 - Edinburgh, United Kingdom
Duration: 30 Jul 20055 Aug 2005

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