Mechanism Design Based on Beliefs about Responsive Play (position paper)

Y Vorobeychik and MP Wellman

ACM Electronic Commerce Workshop on Alternative Solution Concepts for Mechanism Design, Ann Arbor, June 2006.
Copyright © 2006 Vorobeychik and Wellman.

Abstract

In general, identifying a solution concept only incompletely specifies a mechanism design problem. The designer must consider which among a multiplicity of solutions is likely to be played, as well as the possibility that actual play will not correspond to any solution. Given that actual play is the ultimate determiner of a mechanism’s success, we advocate that designers embrace the corresponding forecasting problem and evaluate candidate mechanisms with respect to belief distributions over players’ response. Solution concepts can play a useful role in delimiting and structuring belief distributions. We propose that membership of prospective strategy profiles in various solution classes be treated as evidence bearing on their likelihood of play. Flexible solution classes, for example based on approximate equilibrium, degree of dominance, or safety level, provide natural measures (e.g., distance from equilibrium) that can be employed in defining belief distributions.

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