1 research outputs found
Intervention Mechanism Design for Networks With Selfish Users
We consider a multi-user network where a network manager and selfish users
interact. The network manager monitors the behavior of users and intervenes in
the interaction among users if necessary, while users make decisions
independently to optimize their individual objectives. In this paper, we
develop a framework of intervention mechanism design, which is aimed to
optimize the objective of the manager, or the network performance, taking the
incentives of selfish users into account. Our framework is general enough to
cover a wide range of application scenarios, and it has advantages over
existing approaches such as Stackelberg strategies and pricing. To design an
intervention mechanism and to predict the resulting operating point, we
formulate a new class of games called intervention games and a new solution
concept called intervention equilibrium. We provide analytic results about
intervention equilibrium and optimal intervention mechanisms in the case of a
benevolent manager with perfect monitoring. We illustrate these results with a
random access model. Our illustrative example suggests that intervention
requires less knowledge about users than pricing.Comment: 20 pages, 1 tabl