Revenue equivalence
Revenue equivalence is a concept in auction theory that states that given certain conditions, any mechanism that results in the same outcomes (i.e. allocates items to the same bidders) also has the sa
Median mechanism
A median mechanism is a voting rule that allows people to decide on a value in a one-dimensional domain. Each person votes by writing down his/her ideal value, and the rule selects a single value whic
Random-sampling mechanism
A random-sampling mechanism (RSM) is a truthful mechanism that uses sampling in order to achieve approximately-optimal gain in prior-free mechanisms and prior-independent mechanisms. Suppose we want t
Digital goods auction
In auction theory, a digital goods auction is an auction in which a seller has an unlimited supply of a certain item. A typical example is when a company sells a digital good, such as a movie. The com
Vickrey–Clarke–Groves mechanism
In mechanism design, a Vickrey–Clarke–Groves (VCG) mechanism is a generic truthful mechanism for achieving a socially-optimal solution. It is a generalization of a Vickrey–Clarke–Groves auction. A VCG
Wilson doctrine (economics)
In economic theory, the Wilson doctrine (or Wilson critique) stipulates that game theory should not rely excessively on common knowledge assumptions. Most prominently, it is interpreted as a request f
Cost-sharing mechanism
In economics and mechanism design, a cost-sharing mechanism is a process by which several agents decide on the scope of a public product or service, and how much each agent should pay for it. Cost-sha
Perverse incentive
A perverse incentive is an incentive that has an unintended and undesirable result that is contrary to the intentions of its designers. The cobra effect is the most direct kind of perverse incentive,
Strategic bankruptcy problem
A strategic bankruptcy problem is a variant of a bankruptcy problem (also called claims problem) in which claimants may act strategically, that is, they may manipulate their claims or their behavior.
Incentive compatibility
A mechanism is called incentive-compatible (IC) if every participant can achieve the best outcome to themselves just by acting according to their true preferences. There are several different degrees
Single-parameter utility
In mechanism design, an agent is said to have single-parameter utility if his valuation of the possible outcomes can be represented by a single number. For example, in an auction for a single item, th
Distributed algorithmic mechanism design
Distributed algorithmic mechanism design (DAMD) is an extension of algorithmic mechanism design. DAMD differs from Algorithmic mechanism design since the algorithm is computed in a distributed manner
Participation constraint (mechanism design)
In game theory, and particularly mechanism design, participation constraints or individual rationality constraints are said to be satisfied if a mechanism leaves all participants at least as well-off
Budget-feasible mechanism
In mechanism design, a branch of economics, a budget-feasible mechanism is a mechanism in which the total payment made by the auctioneer is upper-bounded by a fixed pre-specified budget. They were fir
Market design
Market design is a practical methodology for creation of markets of certain properties, which is partially based on mechanism design. In some markets, prices may be used to induce the desired outcomes
Truthful cake-cutting
Truthful cake-cutting is the study of algorithms for fair cake-cutting that are also truthful mechanisms, i.e., they incentivize the participants to reveal their true valuations to the various parts o
Bayesian-optimal mechanism
A Bayesian-optimal mechanism (BOM) is a mechanism in which the designer does not know the valuations of the agents for whom the mechanism is designed, but the designer knows that they are random varia
Maskin monotonicity
Maskin monotonicity is a desired property of voting systems, suggested by Eric Maskin. Each voter reports his entire preference relation over the set of alternatives. The set of reports is called a pr
Incentive-centered design
Incentive-centered design (ICD) is the science of designing a system or institution according to the alignment of individual and user incentives with the goals of the system. Using incentive-centered
Strategyproofness
In game theory, an asymmetric game where players have private information is said to be strategy-proof or strategyproof (SP) if it is a weakly-dominant strategy for every player to reveal his/her priv
Truthful resource allocation
Truthful resource allocation is the problem of allocating resources among agents with different valuations over the resources, such that agents are incentivized to reveal their true valuations over th
Truthful job scheduling
Truthful job scheduling is a mechanism design variant of the job shop scheduling problem from operations research. We have a project composed of several "jobs" (tasks). There are several workers. Each
Multiscale decision-making
Multiscale decision-making, also referred to as multiscale decision theory (MSDT), is an approach in operations research that combines game theory, multi-agent influence diagrams, in particular depend
Algorithmic mechanism design
Algorithmic mechanism design (AMD) lies at the intersection of economic game theory, optimization, and computer science. The prototypical problem in mechanism design is to design a system for multiple
Implementability (mechanism design)
In mechanism design, implementability is a property of a social choice function. It means that there is an incentive-compatible mechanism that attains ("implements")this function. There are several de
Monoculture (computer science)
In computer science, a monoculture is a community of computers that all run identical software. All the computer systems in the community thus have the same vulnerabilities, and, like agricultural mon
Partial allocation mechanism
The Partial Allocation Mechanism (PAM) is a mechanism for truthful resource allocation. It is based on the max-product allocation - the allocation maximizing the product of agents' utilities (also kno
Monotonicity (mechanism design)
In mechanism design, monotonicity is a property of a social choice function. It is a necessary condition for being able to implement the function using a strategyproof mechanism. Its verbal descriptio
Profit extraction mechanism
In mechanism design and auction theory, a profit extraction mechanism (also called profit extractor or revenue extractor) is a truthful mechanism whose goal is to win a pre-specified amount of profit,
Designing Economic Mechanisms
Designing Economic Mechanisms is a 2006 book by economists Leonid Hurwicz and Stanley Reiter. Hurwicz received the 2007 Nobel Memorial Prize in Economic Sciences with Eric Maskin and Roger Myerson for
Prior-free mechanism
A prior-free mechanism (PFM) is a mechanism in which the designer does not have any information on the agents' valuations, not even that they are random variables from some unknown probability distrib
Myerson–Satterthwaite theorem
The Myerson–Satterthwaite theorem is an important result in mechanism design and the economics of asymmetric information, and named for Roger Myerson and Mark Satterthwaite. Informally, the result say
Virtual valuation
In auction theory, particularly Bayesian-optimal mechanism design, a virtual valuation of an agent is a function that measures the surplus that can be extracted from that agent. A typical application
Prophet inequality
In the theory of online algorithms and optimal stopping, a prophet inequality is a bound on the expected value of a decision-making process that handles a sequence of random inputs from known probabil
Participation criterion
The participation criterion is a voting system criterion. Voting systems that fail the participation criterion are said to exhibit the no show paradox and allow a particularly unusual strategy of tact
Prior-independent mechanism
A Prior-independent mechanism (PIM) is a mechanism in which the designer knows that the agents' valuations are drawn from some probability distribution, but does not know the distribution. A typical a
Mechanism design
Mechanism design is a field in economics and game theory that takes an objectives-first approach to designing economic mechanisms or incentives, toward desired objectives, in strategic settings, where
Bayesian-optimal pricing
Bayesian-optimal pricing (BO pricing) is a kind of algorithmic pricing in which a seller determines the sell-prices based on probabilistic assumptions on the valuations of the buyers. It is a simple k
Consensus estimate
Consensus estimate is a technique for designing truthful mechanisms in a prior-free mechanism design setting. The technique was introduced for digital goods auctions and later extended to more general
Budget-balanced mechanism
In mechanism design, a branch of economics, a weakly-budget-balanced (WBB) mechanism is a mechanism in which the total payment made by the participants is 0. This means that the mechanism operator doe
Strategic fair division
Strategic fair division is the branch of fair division in which the participants are assumed to hide their preferences and act strategically in order to maximize their own utility, rather than playing
Revelation principle
The revelation principle is a fundamental principle in mechanism design. It states that if a social choice function can be implemented by an arbitrary mechanism (i.e. if that mechanism has an equilibr