Induction over Strategic Agents

Authors:
Fidan Boylu;Haldun Aytug;Gary J. Koehler
Affiliations:
Department of Operations and Information Management, School of Business, University of Connecticut, Storrs, Connecticut 06269;Information Systems and Operations Management Department, The Warrington College of Business Administration, University of Florida, Gainesville, Florida 32611;Information Systems and Operations Management Department, The Warrington College of Business Administration, University of Florida, Gainesville, Florida 32611
Venue:
Information Systems Research
Year:
2010

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Abstract

We study the problem where a decision maker needs to discover a classification rule to classify intelligent, self-interested agents. Agents may engage in strategic behavior to alter their characteristics for a favorable classification. We show how the decision maker can induce a classification rule that anticipates such behavior while still satisfying an important risk minimization principle.