10,273 research outputs found
Social Interactions and Spillovers
The aim of this paper is to provide a tractable model where both socialization (or network formation) and productive efforts can be analyzed simultaneously. This permits a full-fledged equilibrium/welfare analysis of network formation with endogenous productive efforts and heterogeneous agents. We show that there exist two stable interior equilibria, which we can Pareto rank. The socially efficient outcome lies between these two equilibria. When the intrinsic returns to production and socialization increase, all equilibrium actions decrease at the Pareto-superior equilibrium, while they increase at the Pareto-inferior equilibrium. In both cases, the percentage change in socialization effort is higher (in absolute value) than that of the productive effort.Peer effects; network formation; welfare
Social interactions and spillovers.
The aim of this paper is to provide a tractable model where both socialization (or network formation) and productive efforts can be analyzed simultaneously. This permits a fullfledged equilibrium/welfare analysis of network formation with endogenous productive efforts and heterogeneous agents. We show that there exist two stable interior equilibria, which we can Pareto rank. The socially efficient outcome lies between these two equilibria. When the intrinsic returns to production and socialization increase, all equilibrium actions decrease at the Pareto-superior equilibrium, while they increase at the Pareto-inferior equilibrium. In both cases, the percentage change in socialization effort is higher (in absolute value) than that of the productive effortPeer effects; Network formation; Welfare;
Approximate Equilibrium and Incentivizing Social Coordination
We study techniques to incentivize self-interested agents to form socially
desirable solutions in scenarios where they benefit from mutual coordination.
Towards this end, we consider coordination games where agents have different
intrinsic preferences but they stand to gain if others choose the same strategy
as them. For non-trivial versions of our game, stable solutions like Nash
Equilibrium may not exist, or may be socially inefficient even when they do
exist. This motivates us to focus on designing efficient algorithms to compute
(almost) stable solutions like Approximate Equilibrium that can be realized if
agents are provided some additional incentives. Our results apply in many
settings like adoption of new products, project selection, and group formation,
where a central authority can direct agents towards a strategy but agents may
defect if they have better alternatives. We show that for any given instance,
we can either compute a high quality approximate equilibrium or a near-optimal
solution that can be stabilized by providing small payments to some players. We
then generalize our model to encompass situations where player relationships
may exhibit complementarities and present an algorithm to compute an
Approximate Equilibrium whose stability factor is linear in the degree of
complementarity. Our results imply that a little influence is necessary in
order to ensure that selfish players coordinate and form socially efficient
solutions.Comment: A preliminary version of this work will appear in AAAI-14:
Twenty-Eighth Conference on Artificial Intelligenc
Efficient computation of approximate pure Nash equilibria in congestion games
Congestion games constitute an important class of games in which computing an
exact or even approximate pure Nash equilibrium is in general {\sf
PLS}-complete. We present a surprisingly simple polynomial-time algorithm that
computes O(1)-approximate Nash equilibria in these games. In particular, for
congestion games with linear latency functions, our algorithm computes
-approximate pure Nash equilibria in time polynomial in the
number of players, the number of resources and . It also applies to
games with polynomial latency functions with constant maximum degree ;
there, the approximation guarantee is . The algorithm essentially
identifies a polynomially long sequence of best-response moves that lead to an
approximate equilibrium; the existence of such short sequences is interesting
in itself. These are the first positive algorithmic results for approximate
equilibria in non-symmetric congestion games. We strengthen them further by
proving that, for congestion games that deviate from our mild assumptions,
computing -approximate equilibria is {\sf PLS}-complete for any
polynomial-time computable
COMPETITIVE PRICING IN SOCIALLY NETWORKED ECONOMIES
In the context of a socially networked economy, this paper demonstrates an Edgeworth equivalence between the set of competitive allocations and the core. Each participant in the economy may have multiple links with other participants and the equilibrium network may be as large as the entire set of participants. A clique is a group of people who are all connected with each other. Large cliques, possibly as large as the entire population, are permitted ; this is important since we wish to include in our analysis large, world-wide organizations such as workers in multi-national firms and members of world-wide environmental organizations, for example, as well as small cliques, such as two person partnerships. A special case of our model is equivalent to a club economy where clubs may be large and individuals may belong to multiple clubs. The features of our model that cliques within a networked economy may be as large as the entire population and individuals may belong to multiple cliques thus allow us to extend the extant decentralisation literature on competitive pricing in economies with clubs and multiple memberships (where club sizes are uniformly bounded, independent of the size of the economy).social networks ; competitive pricing ; cliques ; clubs ; Edgeworth equivalence ; core
Designing cost-sharing methods for Bayesian games
We study the design of cost-sharing protocols for two fundamental resource allocation problems, the Set Cover and the Steiner Tree Problem, under environments of incomplete information (Bayesian model). Our objective is to design protocols where the worst-case Bayesian Nash equilibria, have low cost, i.e. the Bayesian Price of Anarchy (PoA) is minimized. Although budget balance is a very natural requirement, it puts considerable restrictions on the design space, resulting in high PoA. We propose an alternative, relaxed requirement called budget balance in the equilibrium (BBiE).We show an interesting connection between algorithms for Oblivious Stochastic optimization problems and cost-sharing design with low PoA. We exploit this connection for both problems and we enforce approximate solutions of the stochastic problem, as Bayesian Nash equilibria, with the same guarantees on the PoA. More interestingly, we show how to obtain the same bounds on the PoA, by using anonymous posted prices which are desirable because they are easy to implement and, as we show, induce dominant strategies for the players
Designing Network Protocols for Good Equilibria
Designing and deploying a network protocol determines the rules by which end users interact with each other and with the network. We consider the problem of designing a protocol to optimize the equilibrium behavior of a network with selfish users. We consider network cost-sharing games, where the set of Nash equilibria depends fundamentally on the choice of an edge cost-sharing protocol. Previous research focused on the Shapley protocol, in which the cost of each edge is shared equally among its users. We systematically study the design of optimal cost-sharing protocols for undirected and directed graphs, single-sink and multicommodity networks, and different measures of the inefficiency of equilibria. Our primary technical tool is a precise characterization of the cost-sharing protocols that induce only network games with pure-strategy Nash equilibria. We use this characterization to prove, among other results, that the Shapley protocol is optimal in directed graphs and that simple priority protocols are essentially optimal in undirected graphs
Testing Core Membership in Public Goods Economies
This paper develops a recent line of economic theory seeking to understand
public goods economies using methods of topological analysis. Our first main
result is a very clean characterization of the economy's core (the standard
solution concept in public goods). Specifically, we prove that a point is in
the core iff it is Pareto efficient, individually rational, and the set of
points it dominates is path connected.
While this structural theorem has a few interesting implications in economic
theory, the main focus of the second part of this paper is on a particular
algorithmic application that demonstrates its utility. Since the 1960s,
economists have looked for an efficient computational process that decides
whether or not a given point is in the core. All known algorithms so far run in
exponential time (except in some artificially restricted settings). By heavily
exploiting our new structure, we propose a new algorithm for testing core
membership whose computational bottleneck is the solution of convex
optimization problems on the utility function governing the economy. It is
fairly natural to assume that convex optimization should be feasible, as it is
needed even for very basic economic computational tasks such as testing Pareto
efficiency. Nevertheless, even without this assumption, our work implies for
the first time that core membership can be efficiently tested on (e.g.) utility
functions that admit "nice" analytic expressions, or that appropriately defined
-approximate versions of the problem are tractable (by using
modern black-box -approximate convex optimization algorithms).Comment: To appear in ICALP 201
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