Multi-Agent Mechanism Design without Money

95 Pages Posted: 10 Mar 2017 Last revised: 27 Sep 2018

See all articles by Santiago Balseiro

Santiago Balseiro

Columbia University - Columbia Business School, Decision Risk and Operations

Huseyin Gurkan

ESMT European School of Management and Technology

Peng Sun

Duke University - Fuqua School of Business

Date Written: September 21, 2018

Abstract

We consider a principal repeatedly allocating a single resource in each period to one of multiple agents, whose values are private, without relying on monetary payments over an infinite horizon with discounting. We design a dynamic mechanism without monetary transfers, which induces agents to report their values truthfully in each period via promises/threats of future favorable/unfavorable allocations. We show that our mechanism asymptotically achieves the first-best efficient allocation (the welfare-maximizing allocation as if values are public) as agents become more patient and provide sharp characterizations of convergence rates to first best as a function of the discount factor. In particular, in the case of two agents we prove that the convergence rate of our mechanism is optimal, i.e., no other mechanism can converge faster to first best.

Keywords: dynamic mechanism design, social efficiency, multi-agent games, resource allocation without money

Suggested Citation

Balseiro, Santiago and Gurkan, Huseyin and Sun, Peng, Multi-Agent Mechanism Design without Money (September 21, 2018). Available at SSRN: https://ssrn.com/abstract=2928854 or http://dx.doi.org/10.2139/ssrn.2928854

Santiago Balseiro

Columbia University - Columbia Business School, Decision Risk and Operations ( email )

3022 Broadway
New York, NY 10027
United States

Huseyin Gurkan (Contact Author)

ESMT European School of Management and Technology ( email )

Schlossplatz 1
10117 Berlin
Germany

Peng Sun

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

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