Person:

Ma, Hongyao

In this extended abstract, we consider simple coordination problems, such as allocating the right to use a shared sports facility in a way that maximizes its usage, or picking the time of a meeting in a way that maximizes attendance. More generally, an alternative is selected by a mechanism in period zero based on reports from agents. This induces a decision problem facing agents in the next period (e.g., to use a resource, or to attend a meeting.) Outcomes are designated as either good or bad, and the design goal is to maximize the probability of good outcomes. For example, a good outcome may be the resource being used, or having enough people attend a meeting.

The existence of truthful social choice mechanisms strongly depends on whether monetary transfers are allowed. Without payments there are no truthful, non-dictatorial mechanisms under mild requirements, whereas the VCG mechanism guarantees truthfulness along with welfare maximization when there are payments and utility is quasi-linear in money. In this paper we study mechanisms in which we can use payments but where agents have non quasi-linear utility functions. Our main result extends the Gibbard-Satterthwaite impossibility result by showing that, for two agents, the only truthful mechanism for at least three alternatives under general decreasing utilities remains dictatorial. We then show how to extend the VCG mechanism to work under a more general utility space than quasi-linear (the "parallel domain) and show that the parallel domain is maximal—no mechanism with the VCG properties exists in any larger domain.

We study the problem of incentivizing reliable demand-response in modern electricity grids. Each agent is uncertain about her future ability to reduce demand and unreliable. Agents who choose to participate in a demand-response scheme may be paid when they respond and penalized otherwise. The goal is to reliably achieve a demand reduction target while selecting a minimal set of agents from those willing to participate. We design incentive-aligned, direct and indirect mechanisms. The direct mechanism elicits both response probabilities and costs, while the indirect mechanism elicits willingness to accept a penalty in the case of non-response. We benchmark against a spot auction, in which demand reduction is purchased from agents when needed. Both the direct and indirect mechanisms achieve the reliability target in a dominant-strategy equilibrium, select a small number of agents to prepare, and do so at low cost and with much lower variance in payments than the spot auction.