Computer Science – Computer Science and Game Theory
Scientific paper
2011-08-30
Computer Science
Computer Science and Game Theory
Scientific paper
In many online systems, individuals provide services for each other. Typically, the recipient of the service obtains a benefit while the provider of the service incurs a cost. Assuming that benefit exceeds cost, provision of the service increases social welfare and should therefore be encouraged -- but the individuals providing the service gain no (immediate) benefit from providing the service and hence have an incentive to withhold service. This paper studies the design of a system to encourage provision of service; the emphasis is on how the system designer should choose a protocol -- a supply of tokens and suggested strategies -- to maximize social welfare. In choosing this protocol, the system designer must take into account that agents are self-interested, and hence will comply with the protocol if and only if it is in their interests to do so. Moreover, we insist that the chosen protocol must be consistent with (small) errors in the designer's knowledge of the system parameters (benefit, cost, discount factors of the agents). Thus, the chosen protocol must induce a robust equilibrium. The paper characterizes protocols that are consistent with robust equilibrium (for various ranges parameters of the population) and, among those, the protocols that maximize social welfare. The social welfare of the optimal equilibrium protocols approximates the first-best if agents are sufficiently patient.
der Schaar Mihaela van
Xu Jie
Zame William
No associations
LandOfFree
Designing Exchange for Online Communities does not yet have a rating. At this time, there are no reviews or comments for this scientific paper.
If you have personal experience with Designing Exchange for Online Communities, we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and Designing Exchange for Online Communities will most certainly appreciate the feedback.
Profile ID: LFWR-SCP-O-728854