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From Monetary to Nonmonetary Mechanism Design via Artificial Currencies

Author

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  • Artur Gorokh

    (Center for Applied Mathematics, Cornell University, Ithaca, New York 14850)

  • Siddhartha Banerjee

    (Operations Research and Information Engineering, Cornell University, Ithaca, New York 14850)

  • Krishnamurthy Iyer

    (Industrial and Systems Engineering, University of Minnesota, Minneapolis, Minnesota 55455)

Abstract

Nonmonetary mechanisms for repeated allocation and decision making are gaining widespread use in many real-world settings. Our aim in this work is to study the performance and incentive properties of simple mechanisms based on artificial currencies in such settings. To this end, we make the following contributions: For a general allocation setting, we provide two black-box approaches to convert any one-shot monetary mechanism to a dynamic nonmonetary mechanism using an artificial currency that simultaneously guarantees vanishing gains from nontruthful reporting over time and vanishing losses in performance. The two mechanisms trade off between their applicability and their computational and informational requirements. Furthermore, for settings with two agents, we show that a particular artificial currency mechanism also results in a vanishing price of anarchy.

Suggested Citation

  • Artur Gorokh & Siddhartha Banerjee & Krishnamurthy Iyer, 2021. "From Monetary to Nonmonetary Mechanism Design via Artificial Currencies," Mathematics of Operations Research, INFORMS, vol. 46(3), pages 835-855, August.
    • Handle: RePEc:inm:ormoor:v:46:y:2021:i:3:p:835-855
    DOI: 10.1287/moor.2020.1098
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    Cited by:

    1. Moise Blanchard & Patrick Jaillet, 2024. "Near-Optimal Mechanisms for Resource Allocation Without Monetary Transfers," Papers 2408.10066, arXiv.org.
    2. Kevin Riehl & Anastasios Kouvelas & Michail Makridis, 2024. "Fair Money -- Public Good Value Pricing With Karma Economies," Papers 2407.05132, arXiv.org.
    3. Jerry Anunrojwong & Krishnamurthy Iyer & Vahideh Manshadi, 2023. "Information Design for Congested Social Services: Optimal Need-Based Persuasion," Management Science, INFORMS, vol. 69(7), pages 3778-3796, July.
    4. Shivam Gupta & Wei Chen & Milind Dawande & Ganesh Janakiraman, 2023. "Three Years, Two Papers, One Course Off: Optimal Nonmonetary Reward Policies," Management Science, INFORMS, vol. 69(5), pages 2852-2869, May.
    5. Ezzat Elokda & Saverio Bolognani & Andrea Censi & Florian Dörfler & Emilio Frazzoli, 2024. "A Self-Contained Karma Economy for the Dynamic Allocation of Common Resources," Dynamic Games and Applications, Springer, vol. 14(3), pages 578-610, July.
    6. Th`anh Nguyen & Alexander Teytelboym & Shai Vardi, 2023. "Dynamic Combinatorial Assignment," Papers 2303.13967, arXiv.org.

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