scholarly journals An Axiomatic View of the Parimutuel Consensus Mechanism

2018 ◽  
Author(s):  
Rupert Freeman ◽  
David M. Pennock
Keyword(s):  
Pareto Optimality ◽  
Incentive Compatibility ◽  
The Other ◽  
Individual Rationality ◽  
Budget Balance ◽  
Incentive Compatible

We consider an axiomatic view of the Parimutuel Consensus Mechanism defined by Eisenberg and Gale (1959). The parimutuel consensus mechanism can be interpreted as a parimutuel market for wagering with a proxy that bets optimally on behalf of the agents, depending on the bets of the other agents.  We show that the parimutuel consensus mechanism uniquely satisfies the desirable properties of Pareto optimality, individual rationality, budget balance, anonymity, sybilproofness and envy-freeness. While the parimutuel consensus mechanism does violate the key property of incentive compatibility, it is incentive compatible in the limit as the number of agents becomes large. Via simulations on real contest data, we show that violations of incentive compatibility are both rare and only minimally beneficial for the participants. This suggests that the parimutuel consensus mechanism is a reasonable mechanism for eliciting information in practice.

scholarly journals Randomized Wagering Mechanisms

2019 ◽  
Vol 33 ◽  
pp. 1845-1852
Author(s):  
Yiling Chen ◽  
Yang Liu ◽  
Juntao Wang
Keyword(s):  
Pareto Optimality ◽  
Design Space ◽  
Incentive Compatibility ◽  
Ground Truth ◽  
Impossibility Result ◽  
Individual Rationality ◽  
Budget Balance ◽  
Information Elicitation ◽  
Recent Extension ◽  
Noisy Labels

Wagering mechanisms are one-shot betting mechanisms that elicit agents’ predictions of an event. For deterministic wagering mechanisms, an existing impossibility result has shown incompatibility of some desirable theoretical properties. In particular, Pareto optimality (no profitable side bet before allocation) can not be achieved together with weak incentive compatibility, weak budget balance and individual rationality. In this paper, we expand the design space of wagering mechanisms to allow randomization and ask whether there are randomized wagering mechanisms that can achieve all previously considered desirable properties, including Pareto optimality. We answer this question positively with two classes of randomized wagering mechanisms: i) one simple randomized lottery-type implementation of existing deterministic wagering mechanisms, and ii) another family of randomized wagering mechanisms, named surrogate wagering mechanisms, which are robust to noisy ground truth. Surrogate wagering mechanisms are inspired by an idea of learning with noisy labels (Natarajan et al. 2013) as well as a recent extension of this idea to the information elicitation without verification setting (Liu and Chen 2018). We show that a broad set of randomized wagering mechanisms satisfy all desirable theoretical properties.

scholarly journals Polyhedral Clinching Auctions for Two-Sided Markets

2021 ◽  
Author(s):  
Hiroshi Hirai ◽  
Ryosuke Sato
Keyword(s):  
Pareto Optimality ◽  
Network Flow ◽  
Flow Model ◽  
Incentive Compatibility ◽  
The Internet ◽  
Matching Markets ◽  
Budget Balance ◽  
Multiunit Auctions ◽  
Exchange Markets ◽  
Two Sided Markets

In this paper, we present a new model and mechanisms for auctions in two-sided markets of buyers and sellers, where budget constraints are imposed on buyers. Our model incorporates polymatroidal environments and is applicable to a variety of models that include multiunit auctions, matching markets, and reservation exchange markets. Our mechanisms are built on the polymatroidal network flow model by Lawler and Martel. Additionally, they feature nice properties such as the incentive compatibility of buyers, individual rationality, Pareto optimality, and strong budget balance. The first mechanism is a two-sided generalization of the polyhedral clinching auction by Goel et al. for one-sided markets. The second mechanism is a reduce-to-recover algorithm that reduces the market to be one-sided, applies the polyhedral clinching auction by Goel et al., and lifts the resulting allocation to the original two-sided market via the polymatroidal network flow. Both mechanisms are implemented by polymatroid algorithms. We demonstrate how our framework is applied to the Internet display advertisement auctions.

scholarly journals Ex-post IR Dynamic Auctions with Cost-per-Action Payments

2018 ◽  
Author(s):  
Weiran Shen ◽  
Zihe Wang ◽  
Song Zuo
Keyword(s):  
Common Knowledge ◽  
Incentive Compatibility ◽  
Individual Rationality ◽  
Incentive Compatible ◽  
Dynamic Auctions ◽  
Ex Post ◽  
Ex Ante ◽  
Ad Auctions ◽  
The Cost ◽  
General Reduction

Motivated by online ad auctions, we consider a repeated auction between one seller and many buyers, where each buyer only has an estimation of her value in each period until she actually receives the item in that period. The seller is allowed to conduct a dynamic auction but must guarantee ex-post individual rationality. In this paper, we use a structure that we call credit accounts to enable a general reduction from any incentive compatible and ex-ante individual rational dynamic auction to an approximate incentive compatible and ex-post individually rational dynamic auction with credit accounts. Our reduction obtains stronger individual rationality guarantees at the cost of weaker incentive compatibility. Surprisingly, our reduction works without any common knowledge assumption. Finally, as a complement to our reduction, we prove that there is no non-trivial auction that is exactly incentive compatible and ex-post individually rational under this setting.

scholarly journals DETERMINAN KINERJA ANGGARAN BELANJA PENDIDIKAN PADA KABUPATEN/KOTA DI ACEH

2019 ◽  
Vol 19 (2) ◽  
pp. 149
Author(s):  
Syukriy Abdullah ◽  
Mulia Saputra ◽  
Dara Fazella ◽  
Hasnawati Hasnawati ◽  
Aulia Afridzal
Keyword(s):  
The Other ◽  
Government Size ◽  
Budget Balance ◽  
Financial Independence ◽  
Revenue Growth ◽  
Local Revenue ◽  
Negative Effect ◽  
Using Data

<p><em>The purpose of this research is to examine the determinants of the Education Budget Performance in Aceh, namely Local Financial Independence, Last Year Budget Balance, Government Size, and Local Revenue Growth using data from districts and cities in Aceh for year 2011-2015. The results of the study show that Local Financial Independence and Last Year Budget Balance has a negative effect on Education Budget Performance, while the other two variables have no effect.</em><em></em></p><p><em> </em><em></em></p>

scholarly journals Rationality in games and institutions

Synthese ◽  
2021 ◽  
Author(s):  
Philippe van Basshuysen
Keyword(s):  
Institutional Design ◽  
Incentive Compatibility ◽  
Social Goals ◽  
General Constraint ◽  
Rational Agents ◽  
Economic Agents ◽  
Incentive Compatible ◽  
Inclusive Concept ◽  
The One ◽  
Orthodox View

AbstractAgainst the orthodox view of the Nash equilibrium as “the embodiment of the idea that economic agents are rational” (Aumann, 1985, p 43), some theorists have proposed ‘non-classical’ concepts of rationality in games, arguing that rational agents should be capable of improving upon inefficient equilibrium outcomes. This paper considers some implications of these proposals for economic theory, by focusing on institutional design. I argue that revisionist concepts of rationality conflict with the constraint that institutions should be designed to be incentive-compatible, that is, that they should implement social goals in equilibrium. To resolve this conflict, proponents of revisionist concepts face a choice between three options: (1) reject incentive compatibility as a general constraint, (2) deny that individuals interacting through the designed institutions are rational, or (3) accept that their concepts do not cover institutional design. I critically discuss these options and I argue that a more inclusive concept of rationality, e.g. the one provided by Robert Sugden’s version of team reasoning, holds the most promise for the non-classical project, yielding a novel argument for incentive compatibility as a general constraint.

scholarly journals Efficient multiunit auctions for normal goods

2020 ◽  
Vol 15 (1) ◽  
pp. 361-413 ◽  
Author(s):  
Brian Baisa
Keyword(s):  
Incentive Compatibility ◽  
Dominant Strategy ◽  
Impossibility Theorem ◽  
Budget Balance ◽  
Auction Design ◽  
Vickrey Auction ◽  
Multiunit Auctions ◽  
Private Values ◽  
Multidimensional Types ◽  
Normal Goods

I study multiunit auction design when bidders have private values, multiunit demands, and non‐quasilinear preferences. Without quasilinearity, the Vickrey auction loses its desired incentive and efficiency properties. I give conditions under which we can design a mechanism that retains the Vickrey auction's desirable incentive and efficiency properties: (1) individual rationality, (2) dominant strategy incentive compatibility, and (3) Pareto efficiency. I show that there is a mechanism that retains the desired properties of the Vickrey auction if there are two bidders who have single‐dimensional types. I also present an impossibility theorem that shows that there is no mechanism that satisfies Vickrey's desired properties and weak budget balance when bidders have multidimensional types.

TWO CHARACTERISATIONS OF THE LEXICOGRAPHIC EGALITARIAN SOLUTION

2001 ◽  
Vol 03 (04) ◽  
pp. 315-323 ◽  
Author(s):  
CHIH CHANG ◽  
YAN-AN HWANG
Keyword(s):  
The Other ◽  
Individual Rationality ◽  
Strong Monotonicity ◽  
Pareto Optimal ◽  
Other Hand ◽  
Reduced Game ◽  
Egalitarian Solution

Two new axioms, additivity of additional bonus (AAB) and reduced game monotonicity (RGM), are introduced. AAB states that the players can gain an additional bonus after they achieved an agreement; on the other hand, if the bargaining fails then they get nothing. With its help, we characterise the lexicographic egalitarian solution by individual rationality (IR), AAB and consistency (CON). The other axiom, RGM, is a weaker axiom than CON and strong monotonicity (SMON), respectively. Using Pareto optimal (PO), IR, AAB and RGM, the second characterisation of the lexicographic egalitarian solution is presented.

An Auction Based Task Dispatching and Pricing Mechanism in Bike-sharing

2021 ◽  
Author(s):  
Bing Shi ◽  
Yaping Deng ◽  
Han Yuan
Keyword(s):  
Private Information ◽  
Optimal Algorithm ◽  
Incentive Compatibility ◽  
Unit Cost ◽  
Low Carbon ◽  
Budget Balance ◽  
Coverage Ratio ◽  
Bike Sharing ◽  
Dispatching Algorithm ◽  
Strategy Proof

Abstract As a green and low-carbon transportation way, bike-sharing provides lots of convenience in the daily life. However, the daily usage of sharing bikes results in dispatching problems, i.e. dispatching bikes to the specific destinations. The bike-sharing platform can hire and pay to workers in order to incentivize them to accomplish the dispatching tasks. However, there exist multiple workers competing for the dispatching tasks, and they may strategically report their task accomplishing costs (which are private information only known by themselves) in order to make more profits, which may result in inefficient task dispatching results. In this paper, we first design a dispatching algorithm named GDY-MAX to allocate tasks to workers, which can achieve good performance. However it cannot prevent workers strategically misreporting their task accomplishing costs. Regarding this issue, we further design a strategy proof mechanism under the budget constraint, which consists of a task dispatching algorithm and a worker pricing algorithm. We theoretically prove that our mechanism can satisfy the properties of incentive compatibility, individual rationality and budget balance. Furthermore we run extensive experiments to evaluate our mechanism based on a dataset from Mobike. The results show that the performance of the proposed strategy proof mechanism and GDY-MAX is similar to the optimal algorithm in terms of the coverage ratio of accomplished task regions and the sum of task region values, and our mechanism has better performance than the uniform algorithm in terms of the total payment and the unit cost value.

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