Abstract
We study the problem of designing truthful mechanisms for players that are (partially) altruistic. Our approach is to extend the standard utility model by encoding other-regarding preferences of the players into the utility functions. By doing so we leave the original domain where VCG mechanisms can be applied directly.
We derive a characterization of the class of truthful mechanisms under the new model, crucially exploiting the specific form of the other-regarding preferences. We also derive sufficient conditions for truthfulness, which we then exploit to derive mechanisms for two specific models of altruism and with respect to two natural social welfare objectives. As it turns out, altruistic dispositions lead to the positive effect that the designer needs to extract smaller payments from the players to ensure truthfulness. Further, we investigate the effect of redistribution mechanisms that can redistribute the payments among the players. Also here, it turns out that altruism has a positive effect in the sense that the payments needed to guarantee truthfulness can be further reduced.
Finally, we illustrate our theoretical results by applying them to well-studied mechanism design problems such as the public project problem and the multi-unit auction problem. Among other results, we show that the problem of funding a public project can be resolved by our mechanism even for moderate altruistic dispositions, while this is impossible in the standard utility setting.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
Notes
- 1.
Intuitively, the function \(g_i\) of player i can be viewed as being dependent on the reported valuation functions \(\vec {b}_{-i}\) of the other players and the payment functions \(\vec {p}\). Formally, however, \(g_i\) only depends on the respective values of these functions under the outcome \((f(\vec {b}),\vec {p}(\vec {b}))\) determined by the mechanism \(M = (f,\vec {p})\) when run on \(\vec {b}\).
- 2.
Note that although our focus here is on altruism levels in the range [0, 1], many results given below can be extended in a straightforward way to other cases such as spiteful players (\(\alpha _i < 0\)) or players that care about others more than about themselves (\(\alpha _i > 1\)).
References
Andreoni, J., Miller, J.: Giving according to GARP: an experimental test of the consistency of preferences for altruism. Econometrica 70(2), 737–753 (2002)
Apt, K.R., Schäfer, G.: Selfishness level of strategic games. J. Artif. Intell. Res. 49, 207–240 (2014)
Bailey, M.J.: The demand revealing process: to distribute the surplus. Public Choice 91(2), 107–126 (1997)
Brandt, F., Weiß, G.: Antisocial agents and Vickrey auctions. In: Meyer, J.-J.C., Tambe, M. (eds.) ATAL 2001. LNCS (LNAI), vol. 2333, pp. 335–347. Springer, Heidelberg (2002). https://doi.org/10.1007/3-540-45448-9_25
Buehler, R., et al.: The price of civil society. In: Chen, N., Elkind, E., Koutsoupias, E. (eds.) WINE 2011. LNCS, vol. 7090, pp. 375–382. Springer, Heidelberg (2011). https://doi.org/10.1007/978-3-642-25510-6_32
Caragiannis, I., Kaklamanis, C., Kanellopoulos, P., Kyropoulou, M., Papaioannou, E.: The impact of altruism on the efficiency of atomic congestion games. In: Wirsing, M., Hofmann, M., Rauschmayer, A. (eds.) TGC 2010. LNCS, vol. 6084, pp. 172–188. Springer, Heidelberg (2010). https://doi.org/10.1007/978-3-642-15640-3_12
Cavallo, R.: Optimal decision-making with minimal waste: strategyproof redistribution of VCG payments. In: Proceedings of the Fifth International Joint Conference on Autonomous Agents and Multiagent Systems, pp. 882–889 (2006)
Cavallo, R.: Efficient auctions with altruism (2012). http://www.eecs.harvard.edu/cavallo/papers/cavallo-altru.pdf
Charness, G., Rabin, M.: Understanding social preferences with simple tests. Q. J. Econ. 117(3), 817–869 (2002)
Chen, P.-A., de Keijzer, B., Kempe, D., Schäfer, G.: The robust price of anarchy of altruistic games. In: Chen, N., Elkind, E., Koutsoupias, E. (eds.) WINE 2011. LNCS, vol. 7090, pp. 383–390. Springer, Heidelberg (2011). https://doi.org/10.1007/978-3-642-25510-6_33
Clarke, E.H.: Multipart pricing of public goods. Public Choice 17–33 (1971)
De Marco, G., Morgan, J.: Altruistic behavior and correlated equilibrium selection. Int. Game Theory Rev. 13(04), 363–381 (2011)
Fehr, E., Fischbacher, U.: Why social preferences matter-the impact of non-selfish motives on competition, cooperation and incentives. Econ. J. 112(478), C1–C33 (2002)
Fehr, E., Schmidt, K.M.: A theory of fairness, competition, and cooperation. Q. J. Econ. 114(3), 817–868 (1999)
Groves, T.: Incentives in teams. Econometrica: J. Econometric Soc. 617–631 (1973)
Guo, M., Markakis, V., Apt, K., Conitzer, V.: Undominated groves mechanisms. J. Artif. Intell. Res. 46, 129–163 (2013)
Guo, M., Conitzer, V.: Worst-case optimal redistribution of VCG payments in multi-unit auctions. Games Econom. Behav. 67(1), 69–98 (2009)
Guo, M., Conitzer, V.: Optimal-in-expectation redistribution mechanisms. Artif. Intell. 174(5–6), 363–381 (2010)
Kahneman, D.: Thinking, Fast and Slow. Macmillan (2011)
Kozlovskaya, M., Nicolò, A.: Public good provision mechanisms and reciprocity. J. Econ. Behav. Organ. 167, 235–244 (2019)
Kucuksenel, S.: Behavioral mechanism design. J. Public Econ. Theory 14(5), 767–789 (2012)
Mas-Colell, A., Whinston, M.D., Green, J.R., et al.: Microeconomic Theory, vol. 1. Oxford University Press, New York (1995)
Moulin, H.: Almost budget-balanced VCG mechanisms to assign multiple objects. J. Econ. Theory 144(1), 96–119 (2009)
Myerson, R.B., Satterthwaite, M.A.: Efficient mechanisms for bilateral trading. J. Econ. Theory 29(2), 265–281 (1983)
Nisan, N., Roughgarden, T., Tardos, E., Vazirani, V.: Algorithmic Game Theory. Cambridge University Press, Cambridge (2007)
Rahn, M., Schäfer, G.: Bounding the inefficiency of altruism through social contribution games. In: Chen, Y., Immorlica, N. (eds.) WINE 2013. LNCS, vol. 8289, pp. 391–404. Springer, Heidelberg (2013). https://doi.org/10.1007/978-3-642-45046-4_32
Tang, P., Sandholm, T.: Optimal auctions for spiteful bidders. In: Twenty-Sixth AAAI Conference on Artificial Intelligence (2012)
Vickrey, W.: Counterspeculation, auctions, and competitive sealed tenders. J. Financ. 16(1), 8–37 (1961)
Acknowledgements
Part of this work was done when Sjir Hoeijmakers was at CWI.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this paper
Cite this paper
Brokkelkamp, R., Hoeijmakers, S., Schäfer, G. (2022). Greater Flexibility in Mechanism Design Through Altruism. In: Kanellopoulos, P., Kyropoulou, M., Voudouris, A. (eds) Algorithmic Game Theory. SAGT 2022. Lecture Notes in Computer Science, vol 13584. Springer, Cham. https://doi.org/10.1007/978-3-031-15714-1_3
Download citation
DOI: https://doi.org/10.1007/978-3-031-15714-1_3
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-031-15713-4
Online ISBN: 978-3-031-15714-1
eBook Packages: Computer ScienceComputer Science (R0)