Mechanism design with efficiency and equality considerations

Abstract

In this work, we consider the problem of allocating a set of homogenous resources (goods) among multiple strategic players to balance the efficiency and equality from a game-theoretic perspective. For two very general classes of efficiency measures and equality measures, we develop a general truthful mechanism framework which optimally maximizes the resource holder’s efficiency while guaranteeing certain equality levels. We fully characterize the optimal allocation rule. Based on the characterizations, we show the optimal allocation and corresponding truthful payments can be computed in polynomial time, which means the truthful mechanism is computationally feasible.