Elsevier

Games and Economic Behavior

Volume 86, July 2014, Pages 491-509
Games and Economic Behavior

Optimal collusion-resistant mechanisms with verification

https://doi.org/10.1016/j.geb.2012.09.002Get rights and content

Abstract

We present the first general positive result on the construction of collusion-resistant mechanisms, that is, mechanisms that guarantee dominant strategies even when agents can form arbitrary coalitions and exchange compensations (sometimes referred to as transferable utilities or side payments). This is a much stronger solution concept as compared to truthful or even group strategyproof mechanisms, and only impossibility results were known for this type of mechanisms in the “classical” model.

We describe collusion-resistant mechanisms with verification that return optimal solutions for a wide class of mechanism design problems (which includes utilitarian ones as a special case). Note that every collusion-resistant mechanism without verification must have an unbounded approximation factor and, in general, optimal solutions cannot be obtained even if we content ourselves with truthful (“non-collusion-resistant”) mechanisms. All these results apply to problems that have been extensively studied in the algorithmic mechanism design literature like, for instance, task scheduling and inter-domain routing.

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    Work partially supported by the European Union under IST FET Integrated Project AEOLUS (IST-015964). A preliminary and partial version of this paper appeared in ACM EC'09.

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