price of anarchy in games of incomplete information
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Price of Anarchy in Games of Incomplete Information. Tim Roughgarden. Alon Ardenboim. Full Information Games. The players payoffs are common knowledge. - PowerPoint PPT PresentationTRANSCRIPT
Tim Roughgarden
PRICE OF ANARCHY IN GAMES OF INCOMPLETE
INFORMATION
Alon Ardenboim
The players payoffs are common knowledge.Pure (Mixed) Nash equilibrium – each players
maximizes his utility (in expectation) when sticking with his current (probabilistic) strategy.
FULL INFORMATION GAMES
Choose a goal function (e.g. welfare maximization).How bad can an equilibrium be w.r.t. the optimal
outcome (e.g. maximum welfare)?.
PRICE OF ANARCHY
Players are uncertain about each other payoffs.For example, auctions (eBay), VCG mechanisms.Assume players’ private preferences are drawn
independently from prior distributions.Distributions ARE common knowledge.
INCOMPLETE INFORMATION GAMES
Type space .Action space . sampled from . is common knowledge.A strategy is a function from type space to a
distribution over actions .A strategy profile is a Bayes-Nash equilibrium if for
every , type and action ,
BAYES-NASH EQUILIBRIUM
The corresponding PoA of such a games measures how bad is the worst Bayes-Nash equilibrium w.r.t the optimal value.
That is,
When is a product dist., this is iPoA (independent).Otherwise, we talk about cPoA (correlated).
BAYES-NASH POA
Def: A game is -smooth w.r.t outcome and a maximization objective function if for every ,
W is payoff-dominating if it bounds the sum of players’ payoffs from above (non-negative transfers).
Thm: if a game is -smooth w.r.t. an optimal outcome for a payoff-dominating then PoA.
Let be a Nash Eq., we have:
SMOOTH FULL INFORMATION GAMES
Def: Let be a game structure and a maximization objective function. The structure is -smooth w.r.t. social choice function if for every and feasible to , we have
Thm: If a game structure is -smooth w.r.t. an optimal choice function for a payoff-dominating , then the iPoA of the game w.r.t. .
SMOOTH INCOMPLETE INFORMATION GAMES
Let be an optimal choice function (that is, if every player plays we get ).
Let be a Bayes-Nash equilibrium. In strategy player samples and plays .
PROOF OF THEOREM
We have:
PROOF CONT.
(Payoff dominant)
(Lin. of Exp.)
(Equilibrium)
(Def.)
(Smooth)
(Lin. of Exp.)
Bayes-Nash
OPT
In the Generalized Second Prize (GSP) auction there are ad slots in a web page. Each with an associated click-through rate.
Each bidder has a private information – valuation per click .
No player overbids (feasible space of bids is ).Assume .
APPLICATION TO GSP
𝛼1
𝛼2
𝛼3
…𝛼𝑘
Assume player gets bids the highest bid.Allocation: assign the slot with CTR .Payment: Charge player the highest bid.Payoff: if .
otherwise ( if bid is feasible).
GSP (CONT.)
Thm: The GSP is a -smooth game (and therefore the iPoA is ) w.r.t. welfare maximization goal function.
Proof: Consider welfare maximization (payoff dominant). Let’s take the social choice function (). Easy to see it’s optimal. Fix a type vector of players valuations and an outcome
(arbitrary bids). Assume . Let denote the index of the highest bidder.
SMOOTHNESS OF GSP
Claim:
for every . :
SMOOTHNESS PROOF (CONT.)
𝛼1
…𝛼 𝑗
…𝛼 𝑖…𝛼𝑘
Claim:
for every . :
SMOOTHNESS PROOF (CONT.)
𝛼1
…𝛼 𝑗
…𝛼 𝑖…𝛼𝑘
𝛼 𝑗≥𝛼𝑖𝑏𝑖𝑑 ( 𝑗+1 )≤𝑏𝑖=𝑣𝑖 /2
𝑢𝑖¿¿𝛼 𝑗 ⋅ (𝑣𝑖−𝑏𝑖𝑑 ( 𝑗+1 ))≥12𝛼𝑖𝑣 𝑖
Claim:
for every . :
SMOOTHNESS PROOF (CONT.)
𝛼1
…𝛼 𝑗
…𝛼 𝑖…𝛼𝑘
𝑏𝑖𝑑 (𝑖 )≥𝑣𝑖 /2
12𝛼𝑖 𝑣𝑖−𝛼𝑖𝑏𝑖𝑑 (𝑖 )≤ 0≤𝑢𝑖¿
Summing over all players we get:
SMOOTHNESS PROOF (CONT.)
𝑊 (𝐭 ;𝐜∗ ( 𝐭 ) ) ≤𝑊 (𝐬=𝐯 ′ ;𝐚 ) ∀ 𝐯 ′≥𝐚
Application to other games.Other smoothness variants.What to do with correlated type distributions? Is there a relation between cPoA and sPoA?
DIRECTIONS