One-Way Interdependent Games
نویسندگان
چکیده
We introduce a new class of interdependent games, motivated by applications in large-scale power restoration, humanitarian logistics, and integrated supply-chains, where different agents have individual utilities but a social welfare objective must be optimized in a decentralized fashion. In these games, the utilities of one player does not depend on the decisions of the other player, giving her a strong bargaining position. We show that, in this setting, a Nash equilibrium can be arbitrarily far from the social welfare solution and that a VCG mechanism is never budget-balanced. Moreover, taking into account the budget, a VCG mechanism may lead to outcomes as bad as the worst Nash equilibria. We propose a privacy-preserving mechanism that is budget-balanced, incentive-compatible, satisfies ex-post individual rationality conditions, and has a constant price of anarchy. The mechanism is based on a single-offer bargaining protocol and we show that a randomized multi-offer protocol brings no additional benefit.
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