Understanding Mechanism Design - Part 2 of 3: The Vickrey-Clarke-Groves Mechanism

Jeffrey S. Rosenschein*, Michael Wooldridge

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

Researchers are conducting studies to understand the Vickrey-Clarke-Groves Mechanism. For this purpose, an ingenious class of mechanisms exists, known as the Vickrey– Clarke–Groves (VCG) mechanisms, after the three economists that contributed to them, including William Vickrey, Edward H. Clarke, and Theodore Groves. VCG mechanisms constitute a family of related formal approaches that enable researchers to select an outcome out of a set of possible candidate outcomes, implement the utilitarian social welfare function, and incentivize agents to tell the truth about their utilities. The e crux of the mechanism is that a player is taxed according to the loss of utility that their presence causes to others. This simple idea turns out to be remarkably powerful, for it causes the individual to declare its own utility truthfully, which is also what we want for the group’s maximization of true social welfare.

Original languageAmerican English
Article number9471016
Pages (from-to)80-81
Number of pages2
JournalIEEE Intelligent Systems
Volume36
Issue number3
DOIs
StatePublished - 1 May 2021

Cite this