IDEAS home Printed from https://ideas.repec.org/a/inm/oropre/v67y2019i5p1417-1436.html
   My bibliography  Save this article

Multiagent Mechanism Design Without Money

Author

Listed:
  • Santiago R. Balseiro

    (Graduate School of Business, Columbia University, New York, New York 10027)

  • Huseyin Gurkan

    (Fuqua School of Business, Duke University, Durham, North Carolina 27708)

  • Peng Sun

    (Fuqua School of Business, Duke University, Durham, North Carolina 27708)

Abstract

We consider a principal repeatedly allocating a single resource in each period to one of multiple agents, whose values are private, without relying on monetary payments over an infinite horizon with discounting. We design a dynamic mechanism that induces agents to report their values truthfully in each period via promises/threats of future favorable/unfavorable allocations. We show that our mechanism asymptotically achieves the first-best efficient allocation (the welfare-maximizing allocation as if values are public) as agents become more patient and provide sharp characterizations of convergence rates to first best as a function of the discount factor. In particular, in the case of two agents we prove that the convergence rate of our mechanism is optimal—that is, no other mechanism can converge faster to first best.

Suggested Citation

  • Santiago R. Balseiro & Huseyin Gurkan & Peng Sun, 2019. "Multiagent Mechanism Design Without Money," Operations Research, INFORMS, vol. 67(5), pages 1417-1436, September.
    • Handle: RePEc:inm:oropre:v:67:y:2019:i:5:p:1417-1436
    DOI: opre.2018.1820
    as

    Download full text from publisher

    File URL: https://doi.org/opre.2018.1820
    Download Restriction: no
    File URL: https://libkey.io/opre.2018.1820?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dirk Bergemann & Juuso V‰lim‰ki, 2010. "The Dynamic Pivot Mechanism," Econometrica, Econometric Society, vol. 78(2), pages 771-789, March.
    2. Guo, Yingni & Hörner, Johannes, 2015. "Dynamic Mechanisms without Money," Economics Series 310, Institute for Advanced Studies.
    3. Drew Fudenberg & David Levine & Eric Maskin, 2008. "The Folk Theorem With Imperfect Public Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 12, pages 231-273, World Scientific Publishing Co. Pte. Ltd..
    4. Gershkov, Alex & Moldovanu, Benny, 2010. "Efficient sequential assignment with incomplete information," Games and Economic Behavior, Elsevier, vol. 68(1), pages 144-154, January.
    5. Kenneth L. Judd & Sevin Yeltekin & James Conklin, 2003. "Computing Supergame Equilibria," Econometrica, Econometric Society, vol. 71(4), pages 1239-1254, July.
    6. Thomas, Jonathan & Worrall, Tim, 1990. "Income fluctuation and asymmetric information: An example of a repeated principal-agent problem," Journal of Economic Theory, Elsevier, vol. 51(2), pages 367-390, August.
    7. Fernandes, Ana & Phelan, Christopher, 2000. "A Recursive Formulation for Repeated Agency with History Dependence," Journal of Economic Theory, Elsevier, vol. 91(2), pages 223-247, April.
    8. Stephen E. Spear & Sanjay Srivastava, 1987. "On Repeated Moral Hazard with Discounting," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(4), pages 599-617.
    9. Eso, Peter & Futo, Gabor, 1999. "Auction design with a risk averse seller," Economics Letters, Elsevier, vol. 65(1), pages 71-74, October.
    10. D. P. de Farias & B. Van Roy, 2003. "The Linear Programming Approach to Approximate Dynamic Programming," Operations Research, INFORMS, vol. 51(6), pages 850-865, December.
    11. Kris Johnson & David Simchi-Levi & Peng Sun, 2014. "Analyzing Scrip Systems," Operations Research, INFORMS, vol. 62(3), pages 524-534, June.
    12. Yongyang Cai & Yongyang Cai & Kenneth L. Judd, 2017. "Computing Equilibria of Dynamic Games," Operations Research, INFORMS, vol. 65(2), pages 337-356, April.
    13. Matthew O Jackson & Hugo F Sonnenschein, 2007. "Overcoming Incentive Constraints by Linking Decisions -super-1," Econometrica, Econometric Society, vol. 75(1), pages 241-257, January.
    14. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. K. Drakopoulos & R. S. Randhawa, 2021. "Why Perfect Tests May Not Be Worth Waiting For: Information as a Commodity," Management Science, INFORMS, vol. 67(11), pages 6678-6693, November.
    2. Jacquillat, Alexandre & Vaze, Vikrant & Wang, Weilong, 2022. "Primary versus secondary infrastructure capacity allocation mechanisms," European Journal of Operational Research, Elsevier, vol. 303(2), pages 668-687.
    3. Combe, Julien & Nora, Vladyslav & Tercieux, Olivier, 2025. "Dynamic assignment without money: optimality of spot mechanisms," Theoretical Economics, Econometric Society, vol. 20(1), January.
    4. Jerry Anunrojwong & Krishnamurthy Iyer & Vahideh Manshadi, 2023. "Information Design for Congested Social Services: Optimal Need-Based Persuasion," Management Science, INFORMS, vol. 69(7), pages 3778-3796, July.
    5. Shivam Gupta & Wei Chen & Milind Dawande & Ganesh Janakiraman, 2023. "Three Years, Two Papers, One Course Off: Optimal Nonmonetary Reward Policies," Management Science, INFORMS, vol. 69(5), pages 2852-2869, May.
    6. Julien Combe & Vladyslav Nora & Olivier Tercieux, 2021. "Dynamic assignment without money: Optimality of spot mechanisms," Working Papers 2021-11, Center for Research in Economics and Statistics.
    7. Damien Berriaud & Ezzat Elokda & Devansh Jalota & Emilio Frazzoli & Marco Pavone & Florian Dorfler, 2024. "To Spend or to Gain: Online Learning in Repeated Karma Auctions," Papers 2403.04057, arXiv.org, revised Feb 2025.
    8. Liang, Yong & Sun, Peng & Tang, Runyu & Zhang, Chong, 2023. "Efficient resource allocation contracts to reduce adverse events," Other publications TiSEM 0bcf44d9-d0ac-4231-beaf-8, Tilburg University, School of Economics and Management.
    9. Moise Blanchard & Patrick Jaillet, 2024. "Near-Optimal Mechanisms for Resource Allocation Without Monetary Transfers," Papers 2408.10066, arXiv.org.
    10. Ezzat Elokda & Saverio Bolognani & Andrea Censi & Florian Dorfler & Emilio Frazzoli, 2022. "A self-contained karma economy for the dynamic allocation of common resources," Papers 2207.00495, arXiv.org, revised May 2023.
    11. Th`anh Nguyen & Alexander Teytelboym & Shai Vardi, 2023. "Dynamic Combinatorial Assignment," Papers 2303.13967, arXiv.org.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Papadimitriou, Christos & Pierrakos, George & Psomas, Alexandros & Rubinstein, Aviad, 2022. "On the complexity of dynamic mechanism design," Games and Economic Behavior, Elsevier, vol. 134(C), pages 399-427.
    2. Rohit Lamba & Ilia Krasikov, 2017. "A Theory of Dynamic Contracting with Financial Constraints," 2017 Meeting Papers 1544, Society for Economic Dynamics.
    3. Moise Blanchard & Patrick Jaillet, 2024. "Near-Optimal Mechanisms for Resource Allocation Without Monetary Transfers," Papers 2408.10066, arXiv.org.
    4. Mele, Antonio, 2014. "Repeated moral hazard and recursive Lagrangeans," Journal of Economic Dynamics and Control, Elsevier, vol. 42(C), pages 69-85.
    5. Carrasco, Vinicius & Fuchs, William & Fukuda, Satoshi, 2019. "From equals to despots: The dynamics of repeated decision making in partnerships with private information," Journal of Economic Theory, Elsevier, vol. 182(C), pages 402-432.
    6. Golosov, M. & Tsyvinski, A. & Werquin, N., 2016. "Recursive Contracts and Endogenously Incomplete Markets," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 725-841, Elsevier.
    7. Hagedorn, Marcus & Kaul, Ashok & Mennel, Tim, 2010. "An adverse selection model of optimal unemployment insurance," Journal of Economic Dynamics and Control, Elsevier, vol. 34(3), pages 490-502, March.
    8. Doepke, Matthias & Townsend, Robert M., 2006. "Dynamic mechanism design with hidden income and hidden actions," Journal of Economic Theory, Elsevier, vol. 126(1), pages 235-285, January.
    9. Abraham Arpad & Nicola Pavoni, 2004. "Efficient Allocations, with Moral Hazard and Hidden Borrowing and Lending," Levine's Bibliography 122247000000000138, UCLA Department of Economics.
    10. Santiago R. Balseiro & Vahab S. Mirrokni & Renato Paes Leme, 2018. "Dynamic Mechanisms with Martingale Utilities," Management Science, INFORMS, vol. 64(11), pages 5062-5082, November.
    11. Vahab Mirrokni & Renato Paes Leme & Pingzhong Tang & Song Zuo, 2020. "Non‐Clairvoyant Dynamic Mechanism Design," Econometrica, Econometric Society, vol. 88(5), pages 1939-1963, September.
    12. Yared, Pierre, 2010. "A dynamic theory of war and peace," Journal of Economic Theory, Elsevier, vol. 145(5), pages 1921-1950, September.
    13. Bergemann, Dirk & Pavan, Alessandro, 2015. "Introduction to Symposium on Dynamic Contracts and Mechanism Design," Journal of Economic Theory, Elsevier, vol. 159(PB), pages 679-701.
    14. Lipnowski, Elliot & Ramos, João, 2020. "Repeated delegation," Journal of Economic Theory, Elsevier, vol. 188(C).
    15. Sanktjohanser, Anna & Hörner, Johannes, 2022. "Too Much of A Good Thing?," TSE Working Papers 22-1327, Toulouse School of Economics (TSE).
    16. , H. & ,, 2016. "Approximate efficiency in repeated games with side-payments and correlated signals," Theoretical Economics, Econometric Society, vol. 11(1), January.
    17. Said, Maher, 2012. "Auctions with dynamic populations: Efficiency and revenue maximization," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2419-2438.
    18. Arpad Abraham & Nicola Pavoni, 2008. "Efficient Allocations with Moral Hazard and Hidden Borrowing and Lending: A Recursive Formulation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 781-803, October.
    19. Jarque, Arantxa, 2010. "Repeated moral hazard with effort persistence," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2412-2423, November.
    20. Dirk Bergemann & Alessandro Pavan, 2015. "Introduction to JET Symposium Issue on "Dynamic Contracts and Mechanism Design"," Cowles Foundation Discussion Papers 2016, Cowles Foundation for Research in Economics, Yale University.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:oropre:v:67:y:2019:i:5:p:1417-1436. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.