Near-Efficient Allocation Using Artificial Currency in Repeated Settings

15 Pages Posted: 17 Oct 2016

See all articles by Artur Gorokh

Artur Gorokh

Cornell University - Center for Applied Mathematics

Siddhartha Banerjee

Cornell University - School of Operations Research and Information Engineering

Krishnamurthy Iyer

University of Minnesota - Twin Cities - Department of Industrial and Systems Engineering

Date Written: October 15, 2016

Abstract

We study the design of mechanisms without money for repeated allocation of resources among competing agents. Such mechanisms are gaining widespread use in allocating physical and/or computing resources in universities and companies, and also distributing of public goods like vaccines among hospitals and food donations among food banks. We consider repeated allocation mechanisms based on artificial currencies, wherein we first allot each agent a chosen endowment of credits, which they can then use over time to bid for the item in a chosen auction format. Our main contribution is in showing that a simple mechanism, based on a repeated all-pay auction with personalized endowments and static pricing rules, simultaneously guarantees vanishing gains from non-truthful bidding as well as vanishing loss in efficiency. Our work lies at the intersection of dynamic mechanism design and mechanisms without money, and the techniques we develop here may prove of independent interest in these settings.

Keywords: artificial currency, welfare, incentive compatibility, repeated all-pay auctions

Suggested Citation

Gorokh, Artur and Banerjee, Siddhartha and Iyer, Krishnamurthy, Near-Efficient Allocation Using Artificial Currency in Repeated Settings (October 15, 2016). Available at SSRN: https://ssrn.com/abstract=2852895 or http://dx.doi.org/10.2139/ssrn.2852895

Artur Gorokh

Cornell University - Center for Applied Mathematics ( email )

657 Rhodes Hall
Ithaca, NY 14853-3801
United States

Siddhartha Banerjee

Cornell University - School of Operations Research and Information Engineering ( email )

237 Rhodes Hall
Ithaca, NY 14853
United States

Krishnamurthy Iyer (Contact Author)

University of Minnesota - Twin Cities - Department of Industrial and Systems Engineering ( email )

111 Church St SE
Minneapolis, MN 55455
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
256
Abstract Views
1,421
Rank
217,401
PlumX Metrics