Niemeyer, A., & Preusser, J. (2024). Optimal Allocation with Peer Information. arXiv preprint arXiv:2410.08954.
This paper investigates how a principal can optimally allocate a single indivisible good among a set of agents without using monetary transfers, leveraging the information agents possess about each other (peer information). The authors aim to design dominant-strategy incentive-compatible (DIC) mechanisms that incentivize truthful reporting by agents and maximize the principal's utility.
The authors employ a graph-theoretic approach to model and analyze the allocation problem. They introduce the concept of a "feasibility graph" where vertices represent commitments to allocate to an agent under specific type profiles, and edges represent incompatible commitments due to feasibility constraints. This framework allows them to characterize DIC mechanisms as fractional stable sets of the feasibility graph.
The study highlights the complexity of optimal allocation without transfers, emphasizing the importance of peer information and the role of stochastic mechanisms. While optimal mechanisms can be intricate, ranking-based mechanisms offer a practical and approximately optimal solution, particularly in environments with many agents and limited individual informational influence.
This research contributes to mechanism design theory by analyzing allocation problems with correlated types and without transfers, a setting under-explored in the existing literature. The findings have implications for various real-world scenarios like peer review in academia, resource allocation within organizations, and community-based aid distribution.
The paper primarily focuses on allocating a single indivisible good. Future research could explore extensions to multiple goods or divisible resources. Additionally, investigating the performance of ranking-based mechanisms under different network structures and informational settings could provide further insights.
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by Axel Niemeye... о arxiv.org 10-14-2024
https://arxiv.org/pdf/2410.08954.pdfГлибші Запити