Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/167949 
Year of Publication: 
2015
Citation: 
[Journal:] Games [ISSN:] 2073-4336 [Volume:] 6 [Issue:] 3 [Publisher:] MDPI [Place:] Basel [Year:] 2015 [Pages:] 347-367
Publisher: 
MDPI, Basel
Abstract: 
We introduce one-way games, a two-player framework whose distinguishable feature is that the private payoff of one (independent) player is determined only by her own strategy and does not depend on the actions taken by the other (dependent) player. We show that the equilibrium outcome in one-way games without side payments and the social cost of any ex post efficient mechanism can be far from the optimum. We also show that it is impossible to design a Bayes-Nash incentive-compatible mechanism for one-way games that is budget-balanced, individually rational and efficient. To address this negative result, we propose a privacy-preserving mechanism based on a single-offer bargaining made by the dependent player that leverages the intrinsic advantage of the independent player. In this setting the outside option of the dependent player is not known a priori; however, we show that the mechanism satisfies individual rationality conditions, is incentive-compatible, budget-balanced and produces an outcome that is more efficient than the equilibrium without payments. Finally, we show that a randomized multi-offer extension brings no additional benefit in terms of efficiency.
Subjects: 
bargaining
mechanism design
price of anarchy
distributed problem solving
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
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