Industry revenue for online games is surging. A unique phenomenon in this market is the significant volume of trade among game users, who exchange real money for virtual goods that do not exist in the real world. The market of virtual goods has two distinctive characteristics: 1) the resold virtual items normally involve no quality loss since the attributes are digitally defined, and 2) the gam...

We study the problem of allocating a set of indivisible items to players having additive utility functions over the items. We consider allocations in which no player envies the bundle of items allocated to the other players too much. We present a simple proof that deterministic truthful allocations do not minimize envy by characterizing the truthful mechanisms for two players and two items. Als...

In this account of the history of voting-power measurement, we confine ourselves to the concept of a priori voting power. We show how the concept was re-invented several times and how the circumstances in which it was reinvented led to conceptual confusion as to the true meaning of what is being measured. In particular, power-as-influence was conflated with value in the sense of transferable ut...

There are M excludable and indivisible public goods, labeled by j ∈ J = {1, ...,M} and n agents, indexed by i ∈ I = {1, ..., n}. The cost of providing good j, denoted Cj (n), is independent of which of the other goods are provided. Notice that Cj (n) depends on n, the number of agents in the economy, and not on the number of users. This assumption captures the fully non-rival nature of the publ...

The paper studies the fair allocation of a finite set of indivisible goods among a finite set of agents. We focus on multiple assignment problems without free disposal so that, at least one agent receives more than one object. No monetary transfers are involved. The criteria include: (i) Pareto-efficiency; (ii) no-envy and derived notions namely single object no-envy which requires that all age...

In lecture 17, we discussed spectrum allocation. In the US, the FCC has used various methods to allocate spectrum, a finite resource that has now been fully allocated. That means that there is no spectrum left for newer technologies like mobile phones, so the FCC must reallocate. Currently, the FCC is implementing a mechanism called an incentive auction, which involves a reverse auction and a f...

Which punishment or rewards are most effective at maintaining cooperation in public goods interactions and deterring defectors who are willing to freeload on others' contribution? The sanction system is itself a public good and can cause problematic "second-order free riders" who do not contribute to the provisions of the sanctions and thus may subvert the cooperation supported by sanctioning. ...

This paper describes an application of agent-based modeling to investigate the effect of a distance-based transaction cost on trade. Long-distance trade is rapidly increasing, but may ultimately be constrained by our ability to move material goods between sellers and buyers. Unlike information exchange, trade in material goods is dependent on the price of oil and vulnerable to future scarcities...