[freehaven-dev] Fwd: Re: Thoughts on general equilibrium for mix-acc paper

[Michael J Freedman <mfreed@MIT.EDU>]

A reply from economist friend re: general equilibrium.

>Date: Fri, 02 Mar 2001 14:54:27 -0500
>To: Michael J Freedman <mfreed@mit.edu>
>From: Robert Zeithammer <rzeitham@MIT.EDU>
>Subject: Re: Thoughts on general equilibrium for mix-acc paper
>
>Mike,
>
>Though I do not understand you setup in detail, here are some thoughts on
>general equilibrium problems:
>
>1) You have node owners, node scorers, and users. What are their
>incentives? What is each of these parties trying to maximize? The
>node-owners presumably do not want a lot of traffic. So whatever the
>scoring mechanism, they will try to avoid looking like the nodes that can
>handle traffic. This is a classic gaming problem - if you set up a
>mechanism for exchange of value, people will try to game it so that they
>get the most out of it while contributing the least.
>
>2) The user wants a fast high-quality transmission. Given what the
>node-owners are doing, the users will interpret the resulting scores in a
>clever way, not naively. In particular, they interpret the information
>contained in the score knowing and understanding the node-owner incentives. 
>
>To avoids situations like the above one, we try to implement so-called
>incentive-compatible mechanisms. In them, each agent type has a clear
>incentive to behave in a way that is expected. Therefore, others can
>interpret behavior to deduce the underlying type (like interpreting a high
>score to mean good node). Unfortunately and probably obviously, these
>mechanisms do not always exist and often come at a cost.
>
>R

-----
"Not all those who wander are lost."                  mfreed@mit.edu