Today Me, Tomorrow Thee: Efficient Resource Allocation in Competitive Settings using Karma Games
This provides a simple and robust solution for resource allocation problems in competitive settings, assuming a karma accounting mechanism is available.
The paper tackles the problem of efficient resource allocation among self-interested agents by introducing karma games, where agents exchange karma to coordinate usage, and finds that Nash equilibria achieve social welfare close to a centralized cooperative solution.
We present a new type of coordination mechanism among multiple agents for the allocation of a finite resource, such as the allocation of time slots for passing an intersection. We consider the setting where we associate one counter to each agent, which we call karma value, and where there is an established mechanism to decide resource allocation based on agents exchanging karma. The idea is that agents might be inclined to pass on using resources today, in exchange for karma, which will make it easier for them to claim the resource use in the future. To understand whether such a system might work robustly, we only design the protocol and not the agents' policies. We take a game-theoretic perspective and compute policies corresponding to Nash equilibria for the game. We find, surprisingly, that the Nash equilibria for a society of self-interested agents are very close in social welfare to a centralized cooperative solution. These results suggest that many resource allocation problems can have a simple, elegant, and robust solution, assuming the availability of a karma accounting mechanism.