Games 2015, 6(3), 347-367; https://doi.org/10.3390/g6030347
Bargaining Mechanisms for One-Way Games†
1
National Information and Communications Technology Australia, NICTA Victoria Lab, West Melbourne, VIC 3003, Australia
2
Department of Computing and Information Systems, The University of Melbourne, Parkville, VIC 3010, Australia
3
Centre for Business Analytics, Melbourne Business School, The University of Melbourne, Parkville, VIC 3010, Australia
4
Department of Industrial and Operations Engineering, University of Michigan, 1205 Beal Avenue, Ann Arbor, MI 48109, USA
*
Author to whom correspondence should be addressed.
†
An earlier, shorter version of this paper appeared in the Proceedings of the 24th International Joint Conference on Artificial Intelligence (IJCAI), 2015 [1].
Academic Editor: Bahar Leventoglu
Received: 1 June 2015 / Revised: 20 August 2015 / Accepted: 27 August 2015 / Published: 8 September 2015
(This article belongs to the Special Issue Bargaining Games)
Abstract
We introduce one-way games, a two-player framework whose distinguishable feature is that the private payoff of one (independent) player is determined only by her own strategy and does not depend on the actions taken by the other (dependent) player. We show that the equilibrium outcome in one-way games without side payments and the social cost of any ex post efficient mechanism can be far from the optimum. We also show that it is impossible to design a Bayes–Nash incentive-compatible mechanism for one-way games that is budget-balanced, individually rational and efficient. To address this negative result, we propose a privacy-preserving mechanism based on a single-offer bargaining made by the dependent player that leverages the intrinsic advantage of the independent player. In this setting the outside option of the dependent player is not known a priori; however, we show that the mechanism satisfies individual rationality conditions, is incentive-compatible, budget-balanced and produces an outcome that is more efficient than the equilibrium without payments. Finally, we show that a randomized multi-offer extension brings no additional benefit in terms of efficiency. View Full-Text
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MDPI and ACS Style
Abeliuk, A.; Berbeglia, G.; Van Hentenryck, P. Bargaining Mechanisms for One-Way Games. Games 2015, 6, 347-367.