Destroy to save


de Clippel, Geoffroy, Naroditskiy, Victor, Polukarov, Maria, Greenwald, Amy and Jennings, Nicholas R. (2014) Destroy to save. Games and Economic Behavior, 86, 392-404. (doi:10.1016/j.geb.2012.11.002).

Download

[img]
Preview
PDF - Pre print
Download (422Kb)
[img]
Preview
PDF
Download (317Kb) | Preview

Description/Abstract

We study the problem of allocating m identical items among n>m agents with unit demand and private value for consuming the good. We allow payments and focus on dominant-strategy implementation. In the absence of an auctioneer who can absorb payments collected from the agents, the payments must be burnt to support dominant-strategy implementation.

Recent work modified the classic VCG mechanism by redistributing as much of the payments as possible back to the agents while still satisfying incentive constraints. This approach guarantees allocative efficiency, but in some cases a large percentage of social welfare is lost. In this paper, we provide a mechanism that is not allocatively efficient but is instead guaranteed to achieve at least 80% of the social welfare as n→∞. Moreover, in the extreme case of m=n−1 where VCG-based mechanisms provide zero welfare, the percentage of social welfare maintained by our mechanism asymptotically approaches 100%

Item Type: Article
ISSNs: 0899-8256 (print)
1090-2473 (electronic)
Keywords: redistribution mechanisms, budget balance, inefficient allocation
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HV Social pathology. Social and public welfare
Q Science > QA Mathematics > QA75 Electronic computers. Computer science
Divisions: Faculty of Physical Sciences and Engineering > Electronics and Computer Science > Agents, Interactions & Complexity
ePrint ID: 345503
Date Deposited: 22 Nov 2012 05:38
Last Modified: 10 Jun 2014 06:40
Projects:
HUMAN-AGENT COLLECTIVES: FROM FOUNDATIONS TO APPLICATIONS [ORCHID]
Funded by: EPSRC (EP/I011587/1)
Led by: Nick Jennings
1 January 2011 to 31 December 2015
Further Information:Google Scholar
URI: http://eprints.soton.ac.uk/id/eprint/345503

Actions (login required)

View Item View Item

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics