SMU SOE Seminar Series (April 30, 2025): Targetting in Networks: A Mechanism Design Approach

TOPIC:

ABSTRACT

A planner wants to select one agent out of n agents on the basis of a binary characteristic _i {0,1} that is commonly known to all agents but is not observed by the planner. Any pair of agents i and j can either be friends or enemies or impartials of each other. These give rise to three types of graphs- friendship, enemy and impartial graphs. An individual's most preferred outcome is that she be selected. If she is not selected, then she would prefer that a friend be selected, and if neither she herself or a friend is selected, then she would prefer that an impartial agent be selected. Finally, her least preferred outcome is that an enemy be selected.

The planner wants to design a dominant strategy incentive compatible (DSIC) mechanism in order to be able choose a desirable agent. We show that if the planner knows the network of impartial agents and if every pair of agents i and j have at least one common impartial agent, then there is an efficient and DSIC mechanism. We also show that if the planner does not know the network of impartials, then there is no efficient and DSIC mechanism. Finally, under a specific assumption on how the networks of friends, enemies and impartials are generated, we construct a DSIC mechanism which does better than the constant mechanism that selects each agent with probability 1/n.

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