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Algorithmic Mechanism Design

  • Reference work entry
  • First Online:
Encyclopedia of Algorithms

  • 257 Accesses

Years and Authors of Summarized Original Work

  • 1999; Nisan, Ronen

Problem Definition

Mechanism design is a sub-field of economics and game theory that studies the construction of social mechanisms in the presence of selfish agents. The nature of the agents dictates a basic contrast between the social planner, that aims to reach a socially desirable outcome, and the agents, that care only about their own private utility. The underlying question is how to incentivize the agents to cooperate, in order to reach the desirable social outcomes.   

In the Internet era, where computers act and interact on behalf of selfish entities, the connection of the above to algorithmic design suggests itself: suppose that the input to an algorithm is kept by selfish agents, who aim to maximize their own utility. How can one design the algorithm so that the agents will find it in their best interest to cooperate, and a close-to-optimal outcome will be outputted? This is different than classic distributed...

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Notes

  1. 1.

    This model was not explicitly studied in classic auction theory, but standard results from there can be easily adjusted to this setting.

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Author information

Authors and Affiliations

  1. Faculty of Industrial Engineering and Management, Technion, Haifa, Israel

    Ron Lavi

Authors
  1. Ron Lavi
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Editor information

Editors and Affiliations

  1. Department of Electrical Engineering and Computer Science, Northwestern University, Evanston, IL, USA

    Ming-Yang Kao

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Lavi, R. (2016). Algorithmic Mechanism Design. In: Kao, MY. (eds) Encyclopedia of Algorithms. Springer, New York, NY. https://doi.org/10.1007/978-1-4939-2864-4_9

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