Credible, Truthful, and Two-Round (Optimal) Auctions via Cryptographic Commitments

We consider the sale of a single item to multiple buyers by a revenue-maximizing seller. Recent work of Akbarpour and Li formalizes \emph{credibility} as an auction desideratum, and prove that the only optimal, credible, strategyproof auction is the ascending price auction with reserves (Akbarpour and Li, 2019). In contrast, when buyers' valuations are MHR, we show that the mild additional assumption of a cryptographically secure commitment scheme suffices for a simple \emph{two-round} auction which is optimal, strategyproof, and credible (even when the number of bidders is only known by the auctioneer). We extend our analysis to the case when buyer valuations are $\alpha$-strongly regular for any $\alpha > 0$, up to arbitrary $\varepsilon$ in credibility. Interestingly, we also prove that this construction cannot be extended to regular distributions, nor can the $\varepsilon$ be removed with multiple bidders

Privacy-Enhancing First-Price Auctions Using Rational Cryptography

We consider enhancing a sealed-bid single-item auction with \emph{privacy} concerns, our assumption being that bidders primarily care about monetary payoff and secondarily worry about exposing information about their type to other players and learning information about other players\u27 types. To treat privacy explicitly within the game theoretic context, we put forward a novel \emph{hybrid utility} model that considers both fiscal and privacy components in the players\u27 payoffs. We show how to use rational cryptography to approximately implement a given \emph{ex interim} individually strictly rational equilibrium of such an auction (or any game with a winner) without a trusted mediator through a cryptographic protocol that uses only point-to-point authenticated channels between the players. By ``ex interim individually strictly rational\u27\u27 we mean that, given its type and before making its move, each player has a strictly positive expected utility, i.e., it becomes the winner of the auction with positive probability. By ``approximately implement\u27\u27 we mean that, under cryptographic assumptions, running the protocol is a computational Nash equilibrium with a payoff profile negligibly close to the original equilibrium. In addition the protocol has the stronger property that no collusion, of any size, can obtain more by deviating in the implementation than by deviating in the ideal mediated setting which the mechanism was designed in. Also, despite the non-symmetric payoffs profile, the protocol always correctly terminates

Dealing With Misbehavior In Distributed Systems: A Game-Theoretic Approach

Most distributed systems comprise autonomous entities interacting with each other to achieve their objectives. These entities behave selfishly when making decisions. This behavior may result in strategical manipulation of the protocols thus jeopardizing the system wide goals. Micro-economics and game theory provides suitable tools to model such interactions. We use game theory to model and study three specific problems in distributed systems. We study the problem of sharing the cost of multicast transmissions and develop mechanisms to prevent cheating in such settings. We study the problem of antisocial behavior in a scheduling mechanism based on the second price sealed bid auction. We also build models using extensive form games to analyze the interactions of the attackers and the defender in a security game involving honeypots. Multicast cost sharing is an important problem and very few distributed strategyproof mechanisms exist to calculate the costs shares of the users. These mechanisms are susceptible to manipulation by rational nodes. We propose a faithful mechanism which uses digital signatures and auditing to catch and punish the cheating nodes. Such mechanism will incur some overhead. We deployed the proposed and existing mechanisms on planet-lab to experimentally analyze the overhead and other relevant economic properties of the proposed and existing mechanisms. In a second price sealed bid auction, even though the bids are sealed, an agent can infer the private values of the winning bidders, if the auction is repeated for related items. We study this problem from the perspective of a scheduling mechanism and develop an antisocial strategy which can be used by an agent to inflict losses on the other agents. In a security system attackers and defender(s) interact with each other. Examples of such systems are the honeynets which are used to map the activities of the attackers to gain valuable insight about their behavior. The attackers want to evade the honeypots while the defenders want them to attack the honeypots. These interesting interactions form the basis of our research where we develop a model used to analyze the interactions of an attacker and a honeynet system

Decentralized Resource Scheduling in Grid/Cloud Computing

In the Grid/Cloud environment, applications or services and resources belong to different organizations with different objectives. Entities in the Grid/Cloud are autonomous and self-interested; however, they are willing to share their resources and services to achieve their individual and collective goals. In such open environment, the scheduling decision is a challenge given the decentralized nature of the environment. Each entity has specific requirements and objectives that need to achieve. In this thesis, we review the Grid/Cloud computing technologies, environment characteristics and structure and indicate the challenges within the resource scheduling. We capture the Grid/Cloud scheduling model based on the complete requirement of the environment. We further create a mapping between the Grid/Cloud scheduling problem and the combinatorial allocation problem and propose an adequate economic-based optimization model based on the characteristic and the structure nature of the Grid/Cloud. By adequacy, we mean that a comprehensive view of required properties of the Grid/Cloud is captured. We utilize the captured properties and propose a bidding language that is expressive where entities have the ability to specify any set of preferences in the Grid/Cloud and simple as entities have the ability to express structured preferences directly. We propose a winner determination model and mechanism that utilizes the proposed bidding language and finds a scheduling solution. Our proposed approach integrates concepts and principles of mechanism design and classical scheduling theory. Furthermore, we argue that in such open environment privacy concerns by nature is part of the requirement in the Grid/Cloud. Hence, any scheduling decision within the Grid/Cloud computing environment is to incorporate the feasibility of privacy protection of an entity. Each entity has specific requirements in terms of scheduling and privacy preferences. We analyze the privacy problem in the Grid/Cloud computing environment and propose an economic based model and solution architecture that provides a scheduling solution given privacy concerns in the Grid/Cloud. Finally, as a demonstration of the applicability of the approach, we apply our solution by integrating with Globus toolkit (a well adopted tool to enable Grid/Cloud computing environment). We also, created simulation experimental results to capture the economic and time efficiency of the proposed solution

Incentive-driven QoS in peer-to-peer overlays

A well known problem in peer-to-peer overlays is that no single entity has control over the software, hardware and configuration of peers. Thus, each peer can selfishly adapt its behaviour to maximise its benefit from the overlay. This thesis is concerned with the modelling and design of incentive mechanisms for QoS-overlays: resource allocation protocols that provide strategic peers with participation incentives, while at the same time optimising the performance of the peer-to-peer distribution overlay. The contributions of this thesis are as follows. First, we present PledgeRoute, a novel contribution accounting system that can be used, along with a set of reciprocity policies, as an incentive mechanism to encourage peers to contribute resources even when users are not actively consuming overlay services. This mechanism uses a decentralised credit network, is resilient to sybil attacks, and allows peers to achieve time and space deferred contribution reciprocity. Then, we present a novel, QoS-aware resource allocation model based on Vickrey auctions that uses PledgeRoute as a substrate. It acts as an incentive mechanism by providing efficient overlay construction, while at the same time allocating increasing service quality to those peers that contribute more to the network. The model is then applied to lagsensitive chunk swarming, and some of its properties are explored for different peer delay distributions. When considering QoS overlays deployed over the best-effort Internet, the quality received by a client cannot be adjudicated completely to either its serving peer or the intervening network between them. By drawing parallels between this situation and well-known hidden action situations in microeconomics, we propose a novel scheme to ensure adherence to advertised QoS levels. We then apply it to delay-sensitive chunk distribution overlays and present the optimal contract payments required, along with a method for QoS contract enforcement through reciprocative strategies. We also present a probabilistic model for application-layer delay as a function of the prevailing network conditions. Finally, we address the incentives of managed overlays, and the prediction of their behaviour. We propose two novel models of multihoming managed overlay incentives in which overlays can freely allocate their traffic flows between different ISPs. One is obtained by optimising an overlay utility function with desired properties, while the other is designed for data-driven least-squares fitting of the cross elasticity of demand. This last model is then used to solve for ISP profit maximisation