Mechanisms with costly knowledge

[摘要] We propose investigating the design and analysis of game theoretic mechanisms when the players have very unstructured initial knowledge about themselves, but can refine their own knowledge at a cost. We consider several set-theoretic models of ;;costly knowledge;;. Specifically, we consider auctions of a single good in which a player i;;s only knowledge about his own valuation, [theta]i, is that it lies in a given interval [a, b]. However, the player can pay a cost, depending on a and b (in several ways), and learn a possibly arbitrary but shorter (in several metrics) sub-interval, which is guaranteed to contain [theta]i. In light of the set-theoretic uncertainty they face, it is natural for the players to act so as to minimize their regret. As a first step, we analyze the performance of the second-price mechanism in regret-minimizing strategies, and show that, in all our models, it always returns an outcome of very high social welfare.

[发布机构] Massachusetts Institute of Technology