Quantum and algorithmic Bayesian mechanisms

Bayesian implementation concerns decision making problems when agents have incomplete information. This paper proposes that the traditional sufficient conditions for Bayesian implementation shall be amended by virtue of a quantum Bayesian mechanism. Furthermore, by using an algorithmic Bayesian mechanism, this amendment holds in the macro world too.Bayesian implementation; Quantum game theory; Mechanism design

Near-Optimal and Robust Mechanism Design for Covering Problems with Correlated Players

We consider the problem of designing incentive-compatible, ex-post individually rational (IR) mechanisms for covering problems in the Bayesian setting, where players' types are drawn from an underlying distribution and may be correlated, and the goal is to minimize the expected total payment made by the mechanism. We formulate a notion of incentive compatibility (IC) that we call {\em support-based IC} that is substantially more robust than Bayesian IC, and develop black-box reductions from support-based-IC mechanism design to algorithm design. For single-dimensional settings, this black-box reduction applies even when we only have an LP-relative {\em approximation algorithm} for the algorithmic problem. Thus, we obtain near-optimal mechanisms for various covering settings including single-dimensional covering problems, multi-item procurement auctions, and multidimensional facility location.Comment: Major changes compared to the previous version. Please consult this versio

Quantum Bayesian implementation and revelation principle

Bayesian implementation concerns decision making problems when agents have incomplete information. This paper proposes that the traditional sufficient conditions for Bayesian implementation shall be amended by virtue of a quantum Bayesian mechanism. In addition, by using an algorithmic Bayesian mechanism, this amendment holds in the macro world. More importantly, we find that the revelation principle is not always right by using the quantum and algorithmic Bayesian mechanisms.

Public projects, Boolean functions and the borders of Border's theorem

Border's theorem gives an intuitive linear characterization of the feasible interim allocation rules of a Bayesian single-item environment, and it has several applications in economic and algorithmic mechanism design. All known generalizations of Border's theorem either restrict attention to relatively simple settings, or resort to approximation. This paper identifies a complexity-theoretic barrier that indicates, assuming standard complexity class separations, that Border's theorem cannot be extended significantly beyond the state-of-the-art. We also identify a surprisingly tight connection between Myerson's optimal auction theory, when applied to public project settings, and some fundamental results in the analysis of Boolean functions.Comment: Accepted to ACM EC 201

Quantum Bayesian implementation

Bayesian implementation concerns decision making problems when agents have incomplete information. This paper proposes that the traditional sufficient conditions for Bayesian implementation shall be amended by virtue of a quantum Bayesian mechanism. In addition, by using an algorithmic Bayesian mechanism, this amendment holds in the macro world.Comment: 14 pages, 3 figure

Mechanisms for Risk Averse Agents, Without Loss

Auctions in which agents' payoffs are random variables have received increased attention in recent years. In particular, recent work in algorithmic mechanism design has produced mechanisms employing internal randomization, partly in response to limitations on deterministic mechanisms imposed by computational complexity. For many of these mechanisms, which are often referred to as truthful-in-expectation, incentive compatibility is contingent on the assumption that agents are risk-neutral. These mechanisms have been criticized on the grounds that this assumption is too strong, because "real" agents are typically risk averse, and moreover their precise attitude towards risk is typically unknown a-priori. In response, researchers in algorithmic mechanism design have sought the design of universally-truthful mechanisms --- mechanisms for which incentive-compatibility makes no assumptions regarding agents' attitudes towards risk. We show that any truthful-in-expectation mechanism can be generically transformed into a mechanism that is incentive compatible even when agents are risk averse, without modifying the mechanism's allocation rule. The transformed mechanism does not require reporting of agents' risk profiles. Equivalently, our result can be stated as follows: Every (randomized) allocation rule that is implementable in dominant strategies when players are risk neutral is also implementable when players are endowed with an arbitrary and unknown concave utility function for money.Comment: Presented at the workshop on risk aversion in algorithmic game theory and mechanism design, held in conjunction with EC 201

Average-case Approximation Ratio of Scheduling without Payments

Apart from the principles and methodologies inherited from Economics and Game Theory, the studies in Algorithmic Mechanism Design typically employ the worst-case analysis and approximation schemes of Theoretical Computer Science. For instance, the approximation ratio, which is the canonical measure of evaluating how well an incentive-compatible mechanism approximately optimizes the objective, is defined in the worst-case sense. It compares the performance of the optimal mechanism against the performance of a truthful mechanism, for all possible inputs. In this paper, we take the average-case analysis approach, and tackle one of the primary motivating problems in Algorithmic Mechanism Design -- the scheduling problem [Nisan and Ronen 1999]. One version of this problem which includes a verification component is studied by [Koutsoupias 2014]. It was shown that the problem has a tight approximation ratio bound of (n+1)/2 for the single-task setting, where n is the number of machines. We show, however, when the costs of the machines to executing the task follow any independent and identical distribution, the average-case approximation ratio of the mechanism given in [Koutsoupias 2014] is upper bounded by a constant. This positive result asymptotically separates the average-case ratio from the worst-case ratio, and indicates that the optimal mechanism for the problem actually works well on average, although in the worst-case the expected cost of the mechanism is Theta(n) times that of the optimal cost