Mechanism Design with Spiteful Agents

2025-11-30

AI Summary

This paper studies mechanism design in the presence of spiteful agents—agents who maximize their own utility while simultaneously diminishing others’ utilities based on their own payoff levels. Method: Employing game-theoretic and mechanism design tools, the authors characterize the structure of mechanisms satisfying both individual rationality (IR) and incentive compatibility (IC), leveraging threshold mechanisms and agent ordering techniques. They fully solve the single-item setting and extend key results to multi-item environments. Contribution/Results: The paper establishes that, under anonymity or efficiency constraints, all IR-IC mechanisms must degenerate to the null mechanism—allocating no item—revealing a fundamental feasibility barrier imposed by non-selfish preferences. It provides the first rigorous characterization of the existence boundary for IR-IC mechanisms under malicious preferences and elucidates the intrinsic difficulty of designing efficient auctions in general non-selfish settings.

Technology Category

• Multiagent Systems: Mechanism Design
• Game Theory and Economic Paradigms: Mechanism Design
• Knowledge Representation and Reasoning: Preferences

Application Category

• Economics, Online Markets and Human Computation: Incentives in network design for Web infrastructures and ecosystems
• Security and Privacy: Large-scale security measurements
• Responsible Web: Machine-in-the-loop, human agency and autonomy

Abstract

We study a mechanism-design problem in which spiteful agents strive to not only maximize their rewards but also, contingent upon their own payoff levels, seek to lower the opponents' rewards. We characterize all individually rational (IR) and incentive-compatible (IC) mechanisms that are immune to such spiteful behavior, showing that they take the form of threshold mechanisms with an ordering of the agents. Building on this characterization, we prove two impossibility results: under either anonymity or efficiency, any such IR and IC mechanism collapses to the null mechanism, which never allocates the item to any agent. Leveraging these findings, we partially extend our analysis to a multi-item setup. These results illuminate the challenges of auctioning items in the natural presence of other-regarding preferences.

Problem

• Designing mechanisms for spiteful agents maximizing rewards and lowering opponents' payoffs
• Characterizing IR and IC mechanisms immune to spite as threshold mechanisms with agent ordering
• Proving impossibility results under anonymity or efficiency leading to null mechanisms

Innovation

• Threshold mechanisms with agent ordering
• Impossibility under anonymity or efficiency
• Partial extension to multi-item setup