License: Creative Commons Attribution 3.0 Unported license (CC BY 3.0)
When quoting this document, please refer to the following
DOI: 10.4230/LIPIcs.ICALP.2018.155
URN: urn:nbn:de:0030-drops-91599
URL: http://dagstuhl.sunsite.rwth-aachen.de/volltexte/2018/9159/
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Kesselheim, Thomas ; Kodric, Bojana

Price of Anarchy for Mechanisms with Risk-Averse Agents

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LIPIcs-ICALP-2018-155.pdf (0.5 MB)

Abstract

We study the price of anarchy of mechanisms in the presence of risk-averse agents. Previous work has focused on agents with quasilinear utilities, possibly with a budget. Our model subsumes this as a special case but also captures that agents might be less sensitive to payments than in the risk-neutral model. We show that many positive price-of-anarchy results proved in the smoothness framework continue to hold in the more general risk-averse setting. A sufficient condition is that agents can never end up with negative quasilinear utility after playing an undominated strategy. This is true, e.g., for first-price and second-price auctions. For all-pay auctions, similar results do not hold: We show that there are Bayes-Nash equilibria with arbitrarily bad social welfare compared to the optimum.

BibTeX - Entry

@InProceedings{kesselheim_et_al:LIPIcs:2018:9159,
  author =	{Thomas Kesselheim and Bojana Kodric},
  title =	{{Price of Anarchy for Mechanisms with Risk-Averse Agents}},
  booktitle =	{45th International Colloquium on Automata, Languages, and  Programming (ICALP 2018)},
  pages =	{155:1--155:14},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-076-7},
  ISSN =	{1868-8969},
  year =	{2018},
  volume =	{107},
  editor =	{Ioannis Chatzigiannakis and Christos Kaklamanis and D{\'a}niel Marx and Donald Sannella},
  publisher =	{Schloss Dagstuhl--Leibniz-Zentrum fuer Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{http://drops.dagstuhl.de/opus/volltexte/2018/9159},
  URN =		{urn:nbn:de:0030-drops-91599},
  doi =		{10.4230/LIPIcs.ICALP.2018.155},
  annote =	{Keywords: Mechanism Design, Price of Anarchy, Risk Aversion, Smoothness}
}

Keywords: Mechanism Design, Price of Anarchy, Risk Aversion, Smoothness
Collection: 45th International Colloquium on Automata, Languages, and Programming (ICALP 2018)
Issue Date: 2018
Date of publication: 04.07.2018

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