From Monetary to Non-Monetary Mechanism Design via Artificial Currencies

Abstract

Non-monetary mechanisms for repeated allocation and decision-making are gaining widespread use in many real-world settings. Our aim in this work is to study the performance and incentive properties of simple mechanisms based on artificial currencies in such settings.To this end, we make the following contributions: For a general allocation setting, we provide two blackbox approaches to convert any one-shot monetary mechanism to a dynamic non-monetary mechanism using an artificial currency that simultaneously guarantee vanishing gains from non-truthful reporting over time, as well as vanishing losses in performance. The two mechanisms trade-off between their applicability and their computational and informational requirements. Furthermore, for settings with two agents, we show that a particular artificial currency mechanism also results in a vanishing price of anarchy.

Keywords: artificial currency, mechanism design, welfare, repeated allocation