Abstract
In the presence of self-interested parties, mechanism designers typically aim to implement some social-choice function in an equilibrium. This paper studies the cost of such equilibrium requirements in terms of communication. While a certain amount of information . x needs to be communicated just for computing the outcome of a certain social-choice function, an . additional amount of communication may be required for computing the equilibrium-supporting payments (if exist).Our main result shows that the total amount of information required for this task can be greater than . x by a factor linear in the number of players . n, i.e., . n {dot operator} . x (under a common normalization assumption). This is the first known lower bound for this problem. In fact, we show that this result holds even in single-parameter domains. On the positive side, we show that certain classic economic domains, namely, single-item auctions and public-good mechanisms, only entail a small overhead.
| Original language | English |
|---|---|
| Pages (from-to) | 153-167 |
| Number of pages | 15 |
| Journal | Games and Economic Behavior |
| Volume | 77 |
| Issue number | 1 |
| DOIs | |
| State | Published - Jan 2013 |
Bibliographical note
Funding Information:The authors are grateful to Moni Naor, Ilya Segal and two anonymous referees for valuable discussions and comments. Liad Blumrosen was supported by the Israeli Science Foundation grant number 230/10, and his work was done in part while being a post-doc researcher at Microsoft Research, Silicon Valley. Michael Schapira was supported by NSF grant 0331548 and by grants from the Israel Science Foundation and the USA–Israel Bi-national Science Foundation, and his work done in part while interning at Microsoft Research, Silicon Valley, as a graduate student at the Hebrew University of Jerusalem.
Keywords
- Communication complexity
- Implementation
- Mechanism design
- Revelation principle