Distributed Signaling Games

Moran Feldman, Moshe Tennenholtz, Omri Weinstein

Research output: Contribution to journalArticlepeer-review


A recurring theme in recent computer science literature is that proper design of signaling schemes is a crucial aspect of effective mechanisms aiming to optimize social welfare or revenue. One of the research endeavors of this line of work is understanding the algorithmic and computational complexity of designing efficient signaling schemes. In reality, however, information is typically not held by a central authority but is distributed among multiple sources (third-party "mediators"), a fact that dramatically changes the strategic and combinatorial nature of the signaling problem. In this article, we introduce distributed signaling games, while using display advertising as a canonical example for introducing this foundational framework. A distributed signaling game may be a pure coordination game (i.e., a distributed optimization task) or a non-cooperative game. In the context of pure coordination games, we show a wide gap between the computational complexity of the centralized and distributed signaling problems, proving that distributed coordination on revenue-optimal signaling is a much harder problem than its "centralized" counterpart. In the context of non-cooperative games, the outcome generated by the mediators' signals may have different value to each. The reason for that is typically the desire of the auctioneer to align the incentives of the mediators with his own by a compensation relative to the marginal benefit from their signals. We design a mechanism for this problem via a novel application of Shapley's value and show that it possesses some interesting properties; in particular, it always admits a pure Nash equilibrium, and it never decreases the revenue of the auctioneer (relative to his a priori revenue when there are no mediators).

Original languageAmerican English
Article number7
JournalACM Transactions on Economics and Computation
Issue number2
StatePublished - 1 May 2020
Externally publishedYes

Bibliographical note

Funding Information:
At the time of writing, the research of Moran Feldman was supported by Israel Science Foundation (ISF) grant no. 1357/16, the research of Moshe Tennenholtz was supported by the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (Grant No. 740435), and the research of Omri Weinstein was supported by a Simons Society Junior fellowship and NSF CAREER award CCF-1844887. Authors’ addresses: M. Feldman, Microsoft Research, Microsoft-Herzeliya R&D Center P.O. Box 12452 Herzelia 46733 Israel, and University of Haifa; email: moranfe@cs.haifa.ac.il; M. Tennenholtz, Microsoft Research, Microsoft-Herzeliya R&D Center P.O. Box 12452 Herzelia 46733 Israel, and Technion-IIT; email: moshet@ie.technion.ac.il; O. Weinstein, Microsoft Research, Microsoft-Herzeliya R&D Center P.O. Box 12452 Herzelia 46733 Israel, and Columbia University; email: omri@cs.columbia.edu. Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from permissions@acm.org. © 2020 Association for Computing Machinery. 2167-8375/2020/05-ART7 $15.00 https://doi.org/10.1145/3381529

Publisher Copyright:
© 2020 ACM.


  • Shapley value
  • Signaling
  • distributed mechanism design


Dive into the research topics of 'Distributed Signaling Games'. Together they form a unique fingerprint.

Cite this