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Experimental Gaming Comparison of Resource Allocation Rules in Case of Transferable Utilities

Author

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  • N. A. Korgin

    (V. A. Trapeznikov Institute of Control Sciences, 117997, 65 Profsoyuznaya Street, Moscow, Russia†Moscow Institute of Physics and Technology, 123182 Moscow, Russia)

  • V. O. Korepanov

    (V. A. Trapeznikov Institute of Control Sciences, 117997, 65 Profsoyuznaya Street, Moscow, Russia)

Abstract

The present paper discusses the comparative analysis results of resource allocation rules using experiments in the form of business games. The comparative analysis involves five rules. The resource allocation mechanism that gives the efficient solution of the problem without transferable utility, implementing it as dominant strategy equilibrium in the agents game, so called Uniform rule. The mechanism with balanced payments introduced earlier by authors using the Groves Ledyard rule that gives the efficient solution of the problem as a Nash equilibrium in the agents game, as well as its modification reducing the dimension of the action space of the agents. The mechanism from the class of proportional allocation mechanisms, where, the efficient resource allocation also represents a Nash equilibrium, but the payments are unbalanced. Last mechanism in the comparative analysis was originally developed as a distributed optimization algorithm.

Suggested Citation

  • N. A. Korgin & V. O. Korepanov, 2017. "Experimental Gaming Comparison of Resource Allocation Rules in Case of Transferable Utilities," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 19(02), pages 1-11, June.
    • Handle: RePEc:wsi:igtrxx:v:19:y:2017:i:02:n:s0219198917500062
    DOI: 10.1142/S0219198917500062
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    References listed on IDEAS

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    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
    2. Sprumont, Yves, 1991. "The Division Problem with Single-Peaked Preferences: A Characterization of the Uniform Allocation Rule," Econometrica, Econometric Society, vol. 59(2), pages 509-519, March.
    3. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    4. Rajiv T. Maheswaran & Tamer Başar, 2003. "Nash Equilibrium and Decentralized Negotiation in Auctioning Divisible Resources," Group Decision and Negotiation, Springer, vol. 12(5), pages 361-395, September.
    5. Chen, Yan, 2008. "Incentive-compatible Mechanisms for Pure Public Goods: A Survey of Experimental Research," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 67, pages 625-643, Elsevier.
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