Projects per year
Abstract
We study mechanisms for environments in which only a part of agents are directly connected to a mechanism designer and the other agents can participate in a mechanism only through the connected agents' referrals. Agents' network connections are private information, which can be strategically concealed by avoiding making referrals; while the mechanism designer wants to elicit the agents' private information about both payoff types and network connections. The set of feasible allocations is endogenously determined by the actual participants induced by referrals.
As an efficient mechanism, we generalize and characterize a VCG mechanism. It is incentive compatible and individually rational if the social welfare is monotone in participants, but it generically runs deficit as it requires too much compensation for referrals. Alternatively as a budget surplus mechanism, we introduce a multi-level mechanism, in which each agent is compensated by the agents who would not be able to participate without his referrals. Under a multilevel mechanism, we show that fully referring one's acquaintances is a dominant strategy and agents have no incentive to under-report their payoff type if the social welfare is monotone and submodular. As applications, a single-item auction and a public good provision game are studied.
As an efficient mechanism, we generalize and characterize a VCG mechanism. It is incentive compatible and individually rational if the social welfare is monotone in participants, but it generically runs deficit as it requires too much compensation for referrals. Alternatively as a budget surplus mechanism, we introduce a multi-level mechanism, in which each agent is compensated by the agents who would not be able to participate without his referrals. Under a multilevel mechanism, we show that fully referring one's acquaintances is a dominant strategy and agents have no incentive to under-report their payoff type if the social welfare is monotone and submodular. As applications, a single-item auction and a public good provision game are studied.
Original language | English |
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Publication status | Published - 28 Jun 2016 |
Keywords
- mechanism design
- referral program
- reward scheme
- VCG mechanism
- multilevel mechanism
- incentives
- budget balancedness
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Projects
- 1 Finished
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Mechanism Design with Varying Participants
10/07/17 → 9/07/18
Project: University Awarded Project Funding
Activities
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Academic Seminar at Yonsei University
Joosung Lee (Invited speaker)
5 Jan 2018Activity: Participating in or organising an event types › Participation in workshop, seminar, course
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Seminar at Durham University
Joosung Lee (Invited speaker)
10 Feb 2017Activity: Participating in or organising an event types › Participation in workshop, seminar, course
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Economics External Seminar at University of Bristol
Joosung Lee (Invited speaker)
2017Activity: Participating in or organising an event types › Participation in workshop, seminar, course
Profiles
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Joosung Lee
- Business School - Lecturer in Business Economics
- Management Science and Business Economics
Person: Academic: Research Active