Designing Approximately Incentive-Compatible and Welfare-Maximizing Resource Allocation Mechanisms without Payments

Core Concepts

The authors propose a novel neural network-based mechanism, ExS-Net, that achieves a desirable trade-off between social welfare maximization and approximate incentive compatibility in a payment-free resource allocation setting.

Abstract

The authors consider a setting where a supplier needs to allocate limited divisible resources among self-interested agents without the use of payments. They aim to design a mechanism that maximizes social welfare, as measured by Nash Social Welfare (NSW), while ensuring approximate incentive compatibility (IC) - i.e., minimizing the maximum utility gain agents can obtain by misreporting their preferences.
The key contributions are:

They propose a novel neural network architecture called ExS-Net that simulates "money-burning" (intentional withholding of resources) to align agents' incentives with the supplier's objective of maximizing NSW.

They provide generalization bounds for the ExS-Net mechanism, showing that the empirical objective converges to the true objective as the training dataset size increases.

Extensive experiments demonstrate that ExS-Net significantly outperforms the state-of-the-art hand-designed mechanisms, Proportional Fairness (PF) and Partial Allocation (PA), in terms of achieving a superior trade-off between NSW and exploitability (a measure of approximate IC).

They show that ExS-Net is robust to distribution mismatch between the training and test data, maintaining good performance even when the training data contains untruthful agent reports.

Stats

The budget for each resource is set to N/2, where N is the number of agents, creating competition for resources.
Agent values and demands are sampled from uniform and Bernoulli uniform distributions, respectively, within the range [0.1, 1].

Quotes

None.

Key Insights Distilled From

Learning Payment-Free Resource Allocation Mechanisms

by Sihan Zeng,S... at arxiv.org 04-16-2024

https://arxiv.org/pdf/2311.10927.pdf

Deeper Inquiries

How can the ExS-Net mechanism be extended to handle non-linear or more complex utility functions beyond the additive linear form considered in this work

To extend the ExS-Net mechanism to handle non-linear or more complex utility functions, we can incorporate neural networks with more layers and non-linear activation functions. By using deep neural networks, we can capture complex relationships between the agent preferences and the resource allocations. Additionally, we can explore different neural network architectures such as recurrent neural networks (RNNs) or transformers to model sequential or structured data in the utility functions. These architectures can learn intricate patterns and dependencies in the data, allowing for more flexibility in modeling non-linear utility functions.

What are the implications of the proposed approach for real-world applications where the supplier may have additional objectives beyond social welfare, such as revenue maximization or fairness across different agent groups

The proposed approach of ExS-Net has significant implications for real-world applications where the supplier may have additional objectives beyond social welfare. For example:

Revenue Maximization: The ExS-Net mechanism can be adapted to incorporate revenue maximization objectives by adjusting the training process to optimize for both social welfare and revenue. This can be achieved by introducing a revenue component in the learning objective and training the mechanism to balance between social welfare and revenue generation.
Fairness Across Agent Groups: In scenarios where fairness across different agent groups is crucial, the ExS-Net mechanism can be modified to include fairness constraints or metrics in the learning process. By incorporating fairness considerations into the mechanism design, it can ensure equitable resource allocation among diverse agent groups.

Can the ideas behind ExS-Net be applied to other mechanism design problems beyond resource allocation, such as task assignment or matching markets

The ideas behind ExS-Net can be applied to various other mechanism design problems beyond resource allocation, such as task assignment or matching markets. Here's how:

Task Assignment: In task assignment problems, where tasks need to be allocated to agents based on their preferences and capabilities, ExS-Net can be used to design mechanisms that optimize task allocation while ensuring fairness and efficiency. By training the mechanism on task-specific data, it can learn to allocate tasks to agents in a way that maximizes overall task completion and agent satisfaction.
Matching Markets: In matching markets where entities need to be matched based on their preferences, ExS-Net can be employed to design mechanisms that facilitate efficient and fair matching. By training the mechanism on historical matching data, it can learn to make optimal matches between entities while considering constraints and objectives specific to the matching market scenario. This can lead to improved matching outcomes and overall market efficiency.