An MDP-Based Approach to Online Mechanism Design

Part of Advances in Neural Information Processing Systems 16 (NIPS 2003)

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David C. Parkes, Satinder Singh


Online mechanism design (MD) considers the problem of provid- ing incentives to implement desired system-wide outcomes in sys- tems with self-interested agents that arrive and depart dynami- cally. Agents can choose to misrepresent their arrival and depar- ture times, in addition to information about their value for di(cid:11)erent outcomes. We consider the problem of maximizing the total long- term value of the system despite the self-interest of agents. The online MD problem induces a Markov Decision Process (MDP), which when solved can be used to implement optimal policies in a truth-revealing Bayesian-Nash equilibrium.