On the power of mediators

Abstract

We consider a problem at the intersection of distributed computing and game theory, namely: Is it possible to achieve the "windfall of malice" even without the actual presence of malicious players? Our answer to this question is "Yes and No". Our positive result is that for the virus inoculation game, it is possible to achieve the windfall of malice by use of a mediator. Our negative result is that for symmetric congestion games that are known to have a windfall of malice, it is not possible to design a mediator that achieves this windfall. In proving these two results, we develop novel techniques for mediator design that we believe will be helpful for creating non-trivial mediators to improve social welfare in a large class of games. © 2009 Springer-Verlag Berlin Heidelberg.