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Implementability (mechanism Design)
Implementation theory is an area of research in game theory concerned with whether a class of Mechanism design, mechanisms (or institutions) can be designed whose equilibrium outcomes implement a given set of normative goals or Welfare economics, welfare criteria.Palfrey, Thomas R. "Chapter 61 Implementation Theory." Handbook of Game Theory with Economic Applications, 2002. . There are two general types of implementation problems: the economic problem of Production (economics), producing and Resource allocation, allocating Public good (economics), public and private goods and choosing over a finite set of alternatives.Maskin, Eric and Sjöström, Tomas. "Implementation Theory." Handbook of Social Choice and Welfare, 2002. . In the case of producing and allocating public/private goods, solution concepts are focused on finding Dominant Strategy, dominant strategies. In his paper "Counterspeculation, Auctions, and Competitive Sealed Tenders", William Vickrey showed that if preferences ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Game Theory
Game theory is the study of mathematical models of strategic interactions. It has applications in many fields of social science, and is used extensively in economics, logic, systems science and computer science. Initially, game theory addressed two-person zero-sum games, in which a participant's gains or losses are exactly balanced by the losses and gains of the other participant. In the 1950s, it was extended to the study of non zero-sum games, and was eventually applied to a wide range of Human behavior, behavioral relations. It is now an umbrella term for the science of rational Decision-making, decision making in humans, animals, and computers. Modern game theory began with the idea of mixed-strategy equilibria in two-person zero-sum games and its proof by John von Neumann. Von Neumann's original proof used the Brouwer fixed-point theorem on continuous mappings into compact convex sets, which became a standard method in game theory and mathematical economics. His paper was f ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Incentive Compatible
In game theory and economics, a mechanism is called incentive-compatible (IC) if every participant can achieve their own best outcome by reporting their true preferences. For example, there is incentive compatibility if high-risk clients are better off in identifying themselves as high-risk to insurance firms, who only sell discounted insurance to high-risk clients. Likewise, they would be worse off if they pretend to be low-risk. Low-risk clients who pretend to be high-risk would also be worse off. The concept is attributed to the Russian-born American economist Leonid Hurwicz. Typology There are several different degrees of incentive-compatibility: * The stronger degree is dominant-strategy incentive-compatibility (DSIC). This means that truth-telling is a weakly-dominant strategy, i.e. you fare best or at least not worse by being truthful, regardless of what the others do. In a DSIC mechanism, strategic considerations cannot help any agent achieve better outcomes than the tru ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Strategyproof
In mechanism design, a strategyproof (SP) mechanism is a game form in which each player has a weakly-dominant strategy, so that no player can gain by "spying" over the other players to know what they are going to play. When the players have private information (e.g. their type or their value to some item), and the strategy space of each player consists of the possible information values (e.g. possible types or values), a truthful mechanism is a game in which revealing the true information is a weakly-dominant strategy for each player. An SP mechanism is also called dominant-strategy-incentive-compatible (DSIC), to distinguish it from other kinds of incentive compatibility. A SP mechanism is immune to manipulations by individual players (but not by coalitions). In contrast, in a group strategyproof mechanism, no group of people can collude to misreport their preferences in a way that makes every member better off. In a strong group strategyproof mechanism, no group of people can col ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Incentive-compatible
In game theory and economics, a mechanism is called incentive-compatible (IC) if every participant can achieve their own best outcome by reporting their true preferences. For example, there is incentive compatibility if high-risk clients are better off in identifying themselves as high-risk to insurance firms, who only sell discounted insurance to high-risk clients. Likewise, they would be worse off if they pretend to be low-risk. Low-risk clients who pretend to be high-risk would also be worse off. The concept is attributed to the Russian-born American economist Leonid Hurwicz. Typology There are several different degrees of incentive-compatibility: * The stronger degree is dominant-strategy incentive-compatibility (DSIC). This means that truth-telling is a weakly-dominant strategy, i.e. you fare best or at least not worse by being truthful, regardless of what the others do. In a DSIC mechanism, strategic considerations cannot help any agent achieve better outcomes than the tru ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Social Choice Function
In welfare economics and social choice theory, a social welfare function—also called a social ordering, ranking, utility, or choice function—is a function that ranks a set of social states by their desirability. Each person's preferences are combined in some way to determine which outcome is considered better by society as a whole. It can be seen as mathematically formalizing Rousseau's idea of a general will. Social choice functions are studied by economists as a way to identify socially-optimal decisions, giving a procedure to rigorously define which of two outcomes should be considered better for society as a whole (e.g. to compare two different possible income distributions). They are also used by democratic governments to choose between several options in elections, based on the preferences of voters; in this context, a social choice function is typically referred to as an electoral system. The notion of social utility is analogous to the notion of a utility fun ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Mechanism Design
Mechanism design (sometimes implementation theory or institution design) is a branch of economics and game theory. It studies how to construct rules—called Game form, mechanisms or institutions—that produce good outcomes according to Social welfare function, some predefined metric, even when the designer does not know the players' true preferences or what information they have. Mechanism design thus focuses on the study of solution concepts for a class of private-information games. Mechanism design has broad applications, including traditional domains of economics such as market design, but also political science (through voting theory). It is a foundational component in the operation of the internet, being used in networked systems (such as inter-domain routing), e-commerce, and Sponsored search auction, advertisement auctions by Facebook and Google. Because it starts with the end of the game (a particular result), then works backwards to find a game that implements it, it ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Social Choice Theory
Social choice theory is a branch of welfare economics that extends the Decision theory, theory of rational choice to collective decision-making. Social choice studies the behavior of different mathematical procedures (social welfare function, social welfare functions) used to combine individual preferences into a coherent whole.Amartya Sen (2008). "Social Choice". ''The New Palgrave Dictionary of Economics'', 2nd EditionAbstract & TOC./ref> It contrasts with political science in that it is a Normative economics, normative field that studies how a society can make good decisions, whereas political science is a Positive economics, descriptive field that observes how societies actually do make decisions. While social choice began as a branch of economics and decision theory, it has since received substantial contributions from mathematics, philosophy, political science, and game theory. Real-world examples of social choice rules include constitution, constitutions and Parliamentary ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Outcome (game Theory)
In game theory, the outcome of a game is the ultimate result of a strategic interaction with one or more people, dependant on the choices made by all participants in a certain exchange. It represents the final payoff resulting from a set of actions that individuals can take within the context of the game. Outcomes are pivotal in determining the payoffs and expected utility for parties involved. Game theorists commonly study how the outcome of a game is determined and what factors affect it. A strategy is a set of actions that a player can take in response to the actions of others. Each player’s strategy is based on their expectation of what the other players are likely to do, often explained in terms of probability. Outcomes are dependent on the combination of strategies chosen by involved players and can be represented in a number of ways; one common way is a payoff matrix showing the individual payoffs for each players with a combination of strategies, as seen in the payoff mat ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Revelation Mechanism
The revelation principle is a fundamental result in mechanism design, social choice theory, and game theory which shows it is always possible to design a strategy-resistant implementation of a social decision-making mechanism (such as an electoral system or market).Gibbard, A. 1973. Manipulation of voting schemes: a general result. Econometrica 41, 587–601. It can be seen as a kind of mirror image to Gibbard's theorem. The revelation principle says that if a social choice function can be implemented with some non-honest mechanism—one where players have an incentive to lie—the same function can be implemented by an incentive-compatible (honesty-promoting) mechanism with the same equilibrium outcome (payoffs). The revelation principle shows that, while Gibbard's theorem proves it is impossible to design a system that will always be fully invulnerable to strategy (if we do not know how players will behave), it ''is'' possible to design a system that encourages honesty given a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Strategy Proof
In mechanism design, a strategyproof (SP) mechanism is a game form in which each player has a weakly-dominant strategy, so that no player can gain by "spying" over the other players to know what they are going to play. When the players have private information (e.g. their type or their value to some item), and the strategy space of each player consists of the possible information values (e.g. possible types or values), a truthful mechanism is a game in which revealing the true information is a weakly-dominant strategy for each player. An SP mechanism is also called dominant-strategy-incentive-compatible (DSIC), to distinguish it from other kinds of incentive compatibility. A SP mechanism is immune to manipulations by individual players (but not by coalitions). In contrast, in a group strategyproof mechanism, no group of people can collude to misreport their preferences in a way that makes every member better off. In a strong group strategyproof mechanism, no group of people can col ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Social Choice
Social choice theory is a branch of welfare economics that extends the theory of rational choice to collective decision-making. Social choice studies the behavior of different mathematical procedures ( social welfare functions) used to combine individual preferences into a coherent whole.Amartya Sen (2008). "Social Choice". ''The New Palgrave Dictionary of Economics'', 2nd EditionAbstract & TOC./ref> It contrasts with political science in that it is a normative field that studies how a society can make good decisions, whereas political science is a descriptive field that observes how societies actually do make decisions. While social choice began as a branch of economics and decision theory, it has since received substantial contributions from mathematics, philosophy, political science, and game theory. Real-world examples of social choice rules include constitutions and parliamentary procedures for voting on laws, as well as electoral systems; as such, the field is occasionall ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Mechanism Design
Mechanism design (sometimes implementation theory or institution design) is a branch of economics and game theory. It studies how to construct rules—called Game form, mechanisms or institutions—that produce good outcomes according to Social welfare function, some predefined metric, even when the designer does not know the players' true preferences or what information they have. Mechanism design thus focuses on the study of solution concepts for a class of private-information games. Mechanism design has broad applications, including traditional domains of economics such as market design, but also political science (through voting theory). It is a foundational component in the operation of the internet, being used in networked systems (such as inter-domain routing), e-commerce, and Sponsored search auction, advertisement auctions by Facebook and Google. Because it starts with the end of the game (a particular result), then works backwards to find a game that implements it, it ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
