Responsive lotteries

Abstract

Given a set of alternatives and a single player, we introduce the notion of a responsive lottery. These mechanisms receive as input from the player a reported utility function, specifying a value for each one of the alternatives, and use a lottery to produce as output a probability distribution over the alternatives. Thereafter, exactly one alternative wins (is given to the player) with the respective probability. Assuming that the player is not indifferent to which of the alternatives wins, a lottery rule is called truthful dominant if reporting his true utility function (up to affine transformations) is the unique report that maximizes the expected payoff for the player. We design truthful dominant responsive lotteries. We also discuss their relations with scoring rules and with VCG mechanisms. © 2010 Springer-Verlag Berlin Heidelberg.