On the Power of Mediators

Authors:
Josep Díaz;Dieter Mitsche;Navin Rustagi;Jared Saia
Affiliations:
Deptartament Llenguatges i Sistemes, Universitat Politecnica de Catalunya,;Deptartament Llenguatges i Sistemes, Universitat Politecnica de Catalunya,;Deptartament Llenguatges i Sistemes, Universitat Politecnica de Catalunya,;Department of Computer Science, University of New Mexico,
Venue:
WINE '09 Proceedings of the 5th International Workshop on Internet and Network Economics
Year:
2009

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Abstract

We consider a problem at the intersection of distributed computing and game theory, namely: Is it possible to achieve the "windfall of malice" even without the actual presence of malicious players? Our answer to this question is "Yes and No". Our positive result is that for the virus inoculation game, it is possible to achieve the windfall of malice by use of a mediator. Our negative result is that for symmetric congestion games that are known to have a windfall of malice, it is not possible to design a mediator that achieves this windfall. In proving these two results, we develop novel techniques for mediator design that we believe will be helpful for creating non-trivial mediators to improve social welfare in a large class of games.