Mechanisms with costly knowledge

We propose investigating the design and analysis of game theoretic mechanisms when the players have very unstructured initial knowledge about themselves, but can refine their own knowledge at a cost. We consider several set-theoretic models of "costly knowledge". Specifically, we consider auctions of a single good in which a player i's only knowledge about his own valuation, [theta]i, is that it lies in a given interval [a, b]. However, the player can pay a cost, depending on a and b (in several ways), and learn a possibly arbitrary but shorter (in several metrics) sub-interval, which is guaranteed to contain [theta]i. In light of the set-theoretic uncertainty they face, it is natural for the players to act so as to minimize their regret. As a first step, we analyze the performance of the second-price mechanism in regret-minimizing strategies, and show that, in all our models, it always returns an outcome of very high social welfare.

Department dc:contributor.department

Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2016

Author dc:creator

• Ileri, Atalay M. (Atalay Mert)

Advisor dc:contributor.advisor

• Silvio Micali.

• Electrical Engineering and Computer Science.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/105698

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/105698