Papers for
economic mechanism designers
Papers whose findings have a practical use for this group, as judged from the abstract. Open a paper to read what it means in practice.
Symmetrized guaranteed utility mechanism minimizes risk in social choice
Risk-minimizing GUE-implementations of truthful reporting in a Dynamic Social Choice Problem
Abstract: The Guaranteed Utility Mechanism (GUM) was introduced to implement efficiency in Guaranteed Utility Equilibrium (GUE) in dynamic social choice problems. We show that this mechanism also has a previously unknown connection to risk minimization. Fixing an efficient decision policy, we study variance-minimizing budget-balanced transfer rules in the class of GUE-implementations of truthful reporting. A symmetrized version of GUM (sym-GUM) minimizes the sum of the agents' utility variances under truthful reporting when there is no public state. When a public state is present, a slight modification of this rule yields the minimizer for the same objective. Sym-GUM, however, does not minimize transfer risk. The minimizer for that problem is instead the symmetrized version of a closely related GUM-like transfer rule. In both problems, the minimizing truthful total transfers are unique up to agent-specific constants summing to zero and events of probability zero.
Sender receiver games with payment promises shape outcomes and complexity
Sender-Receiver Games with Payment Commitments
Abstract: We study sender-receiver games in which players commit, before the state is drawn, to payments contingent on the subsequently verified state and the receiver's action. Payments may be transferred or burned, serving as contractual guarantees or promised tips. We analyze equilibrium guarantees, welfare, and computational complexity. For arbitrary finite action sets, we characterize pessimistic utility guarantees under unilateral commitments. Sender-only and sender-first commitments have worst-equilibrium welfare equal to the best constant-action welfare. Simultaneous commitments can instead reduce welfare below every equilibrium of the original game. Neither simultaneous nor sender-first commitments always admit an efficient equilibrium. Receiver-first commitments always admit an efficiently computable welfare-maximizing equilibrium, but can also reduce worst-equilibrium welfare. For binary actions, we characterize their entire equilibrium payoff region. With binary actions, optimal receiver commitments are computable in linear time, whereas optimizing deterministic sender commitments is NP-hard. Privately randomized sender commitments admit an exact $O(n\log n)$ algorithm, with an optimal lottery over at most two schemes differing at only one state. This yields an additive approximation by deterministic commitments. For arbitrary finite action sets, optimal privately randomized sender payoffs equal Bayesian persuasion values: ordinary persuasion with burning alone, and persuasion with nonnegative compliance payments when transfers are allowed. These equivalences yield polynomial-time algorithms with polynomial-size commitment lotteries.