Mechanism Design with Strategic Mediators

We consider the problem of designing mechanisms that interact with strategic agents through strategic intermediaries (or mediators), and investigate the cost to society due to the mediators' strategic behavior. Selfish agents with private information are each associated with exactly one strategic mediator, and can interact with the mechanism exclusively through that mediator. Each mediator aims to optimize the combined utility of his agents, while the mechanism aims to optimize the combined utility of all agents. We focus on the problem of facility location on a metric induced by a publicly known tree. With non-strategic mediators, there is a dominant strategy mechanism that is optimal. We show that when both agents and mediators act strategically, there is no dominant strategy mechanism that achieves any approximation. We, thus, slightly relax the incentive constraints, and define the notion of a two-sided incentive compatible mechanism. We show that the $3$-competitive deterministic mechanism suggested by Procaccia and Tennenholtz (2013) and Dekel et al. (2010) for lines extends naturally to trees, and is still $3$-competitive as well as two-sided incentive compatible. This is essentially the best possible. We then show that by allowing randomization one can construct a $2$-competitive randomized mechanism that is two-sided incentive compatible, and this is also essentially tight. This result also closes a gap left in the work of Procaccia and Tennenholtz (2013) and Lu et al. (2009) for the simpler problem of designing strategy-proof mechanisms for weighted agents with no mediators on a line, while extending to the more general model of trees. We also investigate a further generalization of the above setting where there are multiple levels of mediators.Comment: 46 pages, 1 figure, an extended abstract of this work appeared in ITCS 201

Networks of Complements

We consider a network of sellers, each selling a single product, where the graph structure represents pair-wise complementarities between products. We study how the network structure affects revenue and social welfare of equilibria of the pricing game between the sellers. We prove positive and negative results, both of "Price of Anarchy" and of "Price of Stability" type, for special families of graphs (paths, cycles) as well as more general ones (trees, graphs). We describe best-reply dynamics that converge to non-trivial equilibrium in several families of graphs, and we use these dynamics to prove the existence of approximately-efficient equilibria.Comment: An extended abstract will appear in ICALP 201

Price Competition in Online Combinatorial Markets

We consider a single buyer with a combinatorial preference that would like to purchase related products and services from different vendors, where each vendor supplies exactly one product. We study the general case where subsets of products can be substitutes as well as complementary and analyze the game that is induced on the vendors, where a vendor's strategy is the price that he asks for his product. This model generalizes both Bertrand competition (where vendors are perfect substitutes) and Nash bargaining (where they are perfect complements), and captures a wide variety of scenarios that can appear in complex crowd sourcing or in automatic pricing of related products. We study the equilibria of such games and show that a pure efficient equilibrium always exists. In the case of submodular buyer preferences we fully characterize the set of pure Nash equilibria, essentially showing uniqueness. For the even more restricted "substitutes" buyer preferences we also prove uniqueness over {\em mixed} equilibria. Finally we begin the exploration of natural generalizations of our setting such as when services have costs, when there are multiple buyers or uncertainty about the the buyer's valuation, and when a single vendor supplies multiple products.Comment: accept to WWW'14 (23rd International World Wide Web Conference