Uniform-Price Mechanism Design for a Large Population of Dynamic Agents
It provides a theoretical framework for coordinating large-scale multi-agent systems with dynamic private information, but the results are incremental as they extend existing competitive equilibrium concepts to dynamic settings with approximation guarantees.
This paper addresses dynamic mechanism design for coordinating a large population of agents with private information. It proposes a uniform-price mechanism based on competitive equilibrium that achieves incentive compatibility and implements social choice functions in ε-Nash equilibrium for general nonlinear systems, and in ε-dominant strategy equilibrium for linear quadratic problems with bounded parameters.
This paper focuses on the coordination of a large population of dynamic agents with private information over multiple periods. Each agent maximizes the individual utility, while the coordinator determines the market rule to achieve group objectives. The coordination problem is formulated as a dynamic mechanism design problem. A mechanism is proposed based on the competitive equilibrium of the large population game. We derive the conditions for the general nonlinear dynamic systems under which the proposed mechanism is incentive compatible and can implement the social choice function in $ε$-Nash equilibrium. In addition, we show that for linear quadratic problems with bounded parameters, the proposed mechanism can maximize the social welfare subject to a total resource constraint in $ε$-dominant strategy equilibrium.