Envy, Regret, and Social Welfare Loss

Incentive compatibility (IC) is a desirable property for any auction mechanism, including those used in online advertising. However, in real world applications practical constraints and complex environments often result in mechanisms that lack incentive compatibility. Recently, several papers investigated the problem of deploying black-box statistical tests to determine if an auction mechanism is incentive compatible by using the notion of IC-Regret that measures the regret of a truthful bidder. Unfortunately, most of those methods are computationally intensive, since they require the execution of many counterfactual experiments. In this work, we show that similar results can be obtained using the notion of IC-Envy. The advantage of IC-Envy is its efficiency: it can be computed using only the auction's outcome. In particular, we focus on position auctions. For position auctions, we show that for a large class of pricing schemes (which includes e.g. VCG and GSP), IC-Envy ≥ IC-Regret (and IC-Envy = IC-Regret under mild supplementary conditions). Our theoretical results are completed showing that, in the position auction environment, IC-Envy can be used to bound the loss in social welfare due to the advertiser untruthful behavior. Finally, we show experimentally that IC-Envy can be used as a feature to predict IC-Regret in settings not covered by the theoretical results. In particular, using IC-Envy yields better results than training models using only price and value features

Truthful Allocation Mechanisms Without Payments: Characterization and Implications on Fairness

We study the mechanism design problem of allocating a set of indivisible items without monetary transfers. Despite the vast literature on this very standard model, it still remains unclear how do truthful mechanisms look like. We focus on the case of two players with additive valuation functions and our purpose is twofold. First, our main result provides a complete characterization of truthful mechanisms that allocate all the items to the players. Our characterization reveals an interesting structure underlying all truthful mechanisms, showing that they can be decomposed into two components: a selection part where players pick their best subset among prespecified choices determined by the mechanism, and an exchange part where players are offered the chance to exchange certain subsets if it is favorable to do so. In the remaining paper, we apply our main result and derive several consequences on the design of mechanisms with fairness guarantees. We consider various notions of fairness, (indicatively, maximin share guarantees and envy-freeness up to one item) and provide tight bounds for their approximability. Our work settles some of the open problems in this agenda, and we conclude by discussing possible extensions to more players.Comment: To appear in the 18th ACM Conference on Economics and Computation (ACM EC '17

Multi-Agent Systems for Computational Economics and Finance

In this article we survey the main research topics of our group at the University of Essex. Our research interests lie at the intersection of theoretical computer science, artificial intelligence, and economic theory. In particular, we focus on the design and analysis of mechanisms for systems involving multiple strategic agents, both from a theoretical and an applied perspective. We present an overview of our group’s activities, as well as its members, and then discuss in detail past, present, and future work in multi-agent systems

Mechanisms for fair allocation problems: no-punishment payment rules in verifiable settings

Mechanism design is considered in the context of fair allocations of indivisible goods with monetary compensation, by focusing on problems where agents' declarations on allocated goods can be verified before payments are performed. A setting is considered where verification might be subject to errors, so that payments have to be awarded under the presumption of innocence, as incorrect declared values do not necessarily mean manipulation attempts by the agents. Within this setting, a mechanism is designed that is shown to be truthful, efficient, and budget-balanced. Moreover, agents' utilities are fairly determined by the Shapley value of suitable coalitional games, and enjoy highly desirable properties such as equal treatment of equals, envy-freeness, and a stronger one called individual-optimality. In particular, the latter property guarantees that, for every agent, her/his utility is the maximum possible one over any alternative optimal allocation. The computational complexity of the proposed mechanism is also studied. It turns out that it is #P-complete so that, to deal with applications with many agents involved, two polynomial-time randomized variants are also proposed: one that is still truthful and efficient, and which is approximately budget-balanced with high probability, and another one that is truthful in expectation, while still budget-balanced and efficient

Incentives in One-Sided Matching Problems With Ordinal Preferences

One of the core problems in multiagent systems is how to efficiently allocate a set of indivisible resources to a group of self-interested agents that compete over scarce and limited alternatives. In these settings, mechanism design approaches such as matching mechanisms and auctions are often applied to guarantee fairness and efficiency while preventing agents from manipulating the outcomes. In many multiagent resource allocation problems, the use of monetary transfers or explicit markets are forbidden because of ethical or legal issues. One-sided matching mechanisms exploit various randomization and algorithmic techniques to satisfy certain desirable properties, while incentivizing self-interested agents to report their private preferences truthfully. In the first part of this thesis, we focus on deterministic and randomized matching mechanisms in one-shot settings. We investigate the class of deterministic matching mechanisms when there is a quota to be fulfilled. Building on past results in artificial intelligence and economics, we show that when preferences are lexicographic, serial dictatorship mechanisms (and their sequential dictatorship counterparts) characterize the set of all possible matching mechanisms with desirable economic properties, enabling social planners to remedy the inherent unfairness in deterministic allocation mechanisms by assigning quotas according to some fairness criteria (such as seniority or priority). Extending the quota mechanisms to randomized settings, we show that this class of mechanisms are envyfree, strategyproof, and ex post efficient for any number of agents and objects and any quota system, proving that the well-studied Random Serial Dictatorship (RSD) is also envyfree in this domain. The next contribution of this thesis is providing a systemic empirical study of the two widely adopted randomized mechanisms, namely Random Serial Dictatorship (RSD) and the Probabilistic Serial Rule (PS). We investigate various properties of these two mechanisms such as efficiency, strategyproofness, and envyfreeness under various preference assumptions (e.g. general ordinal preferences, lexicographic preferences, and risk attitudes). The empirical findings in this thesis complement the theoretical guarantees of matching mechanisms, shedding light on practical implications of deploying each of the given mechanisms. In the second part of this thesis, we address the issues of designing truthful matching mechanisms in dynamic settings. Many multiagent domains require reasoning over time and are inherently dynamic rather than static. We initiate the study of matching problems where agents' private preferences evolve stochastically over time, and decisions have to be made in each period. To adequately evaluate the quality of outcomes in dynamic settings, we propose a generic stochastic decision process and show that, in contrast to static settings, traditional mechanisms are easily manipulable. We introduce a number of properties that we argue are important for matching mechanisms in dynamic settings and propose a new mechanism that maintains a history of pairwise interactions between agents, and adapts the priority orderings of agents in each period based on this history. We show that our mechanism is globally strategyproof in certain settings (e.g. when there are 2 agents or when the planning horizon is bounded), and even when the mechanism is manipulable, the manipulative actions taken by an agent will often result in a Pareto improvement in general. Thus, we make the argument that while manipulative behavior may still be unavoidable, it is not necessarily at the cost to other agents. To circumvent the issues of incentive design in dynamic settings, we formulate the dynamic matching problem as a Multiagent MDP where agents have particular underlying utility functions (e.g. linear positional utility functions), and show that the impossibility results still exist in this restricted setting. Nevertheless, we introduce a few classes of problems with restricted preference dynamics for which positive results exist. Finally, we propose an algorithmic solution for agents with single-minded preferences that satisfies strategyproofness, Pareto efficiency, and weak non-bossiness in one-shot settings, and show that even though this mechanism is manipulable in dynamic settings, any unilateral deviation would benefit all participating agents

Economic regulation for multi tenant infrastructures

Large scale computing infrastructures need scalable and effi cient resource allocation mechanisms to ful l the requirements of its participants and applications while the whole system is regulated to work e ciently. Computational markets provide e fficient allocation mechanisms that aggregate information from multiple sources in large, dynamic and complex systems where there is not a single source with complete information. They have been proven to be successful in matching resource demand and resource supply in the presence of sel sh multi-objective and utility-optimizing users and sel sh pro t-optimizing providers. However, global infrastructure metrics which may not directly affect participants of the computational market still need to be addressed -a.k.a. economic externalities like load balancing or energy-efficiency. In this thesis, we point out the need to address these economic externalities, and we design and evaluate appropriate regulation mechanisms from di erent perspectives on top of existing economic models, to incorporate a wider range of objective metrics not considered otherwise. Our main contributions in this thesis are threefold; fi rst, we propose a taxation mechanism that addresses the resource congestion problem e ffectively improving the balance of load among resources when correlated economic preferences are present; second, we propose a game theoretic model with complete information to derive an algorithm to aid resource providers to scale up and down resource supply so energy-related costs can be reduced; and third, we relax our previous assumptions about complete information on the resource provider side and design an incentive-compatible mechanism to encourage users to truthfully report their resource requirements effectively assisting providers to make energy-eff cient allocations while providing a dynamic allocation mechanism to users.Les infraestructures computacionals de gran escala necessiten mecanismes d’assignació de recursos escalables i eficients per complir amb els requisits computacionals de tots els seus participants, assegurant-se de que el sistema és regulat apropiadament per a que funcioni de manera efectiva. Els mercats computacionals són mecanismes d’assignació de recursos eficients que incorporen informació de diferents fonts considerant sistemes de gran escala, complexos i dinàmics on no existeix una única font que proveeixi informació completa de l'estat del sistema. Aquests mercats computacionals han demostrat ser exitosos per acomodar la demanda de recursos computacionals amb la seva oferta quan els seus participants son considerats estratègics des del punt de vist de teoria de jocs. Tot i això existeixen mètriques a nivell global sobre la infraestructura que no tenen per que influenciar els usuaris a priori de manera directa. Així doncs, aquestes externalitats econòmiques com poden ser el balanceig de càrrega o la eficiència energètica, conformen una línia d’investigació que cal explorar. En aquesta tesi, presentem i descrivim la problemàtica derivada d'aquestes externalitats econòmiques. Un cop establert el marc d’actuació, dissenyem i avaluem mecanismes de regulació apropiats basats en models econòmics existents per resoldre aquesta problemàtica des de diferents punts de vista per incorporar un ventall més ampli de mètriques objectiu que no havien estat considerades fins al moment. Les nostres contribucions principals tenen tres vessants: en primer lloc, proposem un mecanisme de regulació de tipus impositiu que tracta de mitigar l’aparició de recursos sobre-explotats que, efectivament, millora el balanceig de la càrrega de treball entre els recursos disponibles; en segon lloc, proposem un model teòric basat en teoria de jocs amb informació o completa que permet derivar un algorisme que facilita la tasca dels proveïdors de recursos per modi car a l'alça o a la baixa l'oferta de recursos per tal de reduir els costos relacionats amb el consum energètic; i en tercer lloc, relaxem la nostra assumpció prèvia sobre l’existència d’informació complerta per part del proveïdor de recursos i dissenyem un mecanisme basat en incentius per fomentar que els usuaris facin pública de manera verídica i explícita els seus requeriments computacionals, ajudant d'aquesta manera als proveïdors de recursos a fer assignacions eficients des del punt de vista energètic a la vegada que oferim un mecanisme l’assignació de recursos dinàmica als usuari