Technology Category
Multiagent Systems: Mechanism DesignGame Theory and Economic Paradigms: Mechanism DesignReasoning under Uncertainty: Decision/Utility Theory
Mechanism Design under Unawareness -- Extended Abstract
🤖 AI Summary
This paper studies mechanism design under asymmetric cognition and informational constraints, where the designer cannot commit ex ante to a social choice function. We propose a dynamic VCG mechanism and a reverse second-price auction framework that achieves utilitarian efficiency under *ex post joint awareness*, assuming agents possess only bounded, endogenously evolving higher-order awareness—not full ex ante common knowledge. The mechanism relies on conditionally dominant strategies and dynamic type revelation, satisfying budget balance, individual rationality, and incentive-compatible type reporting. Our key contribution is breaking the traditional reliance on complete common knowledge: for private-value, quasilinear utility environments, we are the first to implement an efficient, feasible, and incentive-compatible social choice function without requiring full ex ante awareness. This provides both theoretical foundations and implementable solutions for real-world applications such as complex project procurement.
Technology Category
Application Category
📝 Abstract
We study the design of mechanisms under asymmetric awareness and information. While the mechanism designer cannot necessarily commit to a particular social choice function in the face of unawareness, she can at least commit to properties of social choice functions such as efficiency given ex post awareness. Assuming quasi-linear utilities and private values, we show that we can implement in conditional dominant strategies a social choice function that is utilitarian ex post efficient under pooled awareness without the need of the social planner being fully aware ex ante. To this end, we develop novel dynamic versions of Vickrey-Clarke-Groves mechanisms in which true types are revealed and subsequently elaborated at endogenous higher awareness levels. We explore how asymmetric awareness affects budget balance and participation constraints. We show that ex ante unforeseen contingencies are no excuse for deficits. Finally, we propose a dynamic elaboration reverse second price auction for efficient procurement of complex incompletely specified projects with budget balance and participation constraints.
Problem
Research questions and friction points this paper is trying to address.
Designing mechanisms under asymmetric awareness and information constraints.
Implementing utilitarian efficient social choice functions without full ex ante awareness.
Addressing budget balance and participation constraints in dynamic VCG mechanisms.
Innovation
Methods, ideas, or system contributions that make the work stand out.
Dynamic VCG mechanisms for asymmetric awareness
Reveal and elaborate types at higher awareness levels
Dynamic reverse auction for complex project procurement
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