Obtaining costly unverifiable valuations from a single agent
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(2020) 34:46
Obtaining costly unverifiable valuations from a single agent Erel Segal‑Halevi1 · Shani Alkoby1 · David Sarne2
© Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract A principal needs to elicit the true value of an object she owns from an agent who has a unique ability to compute this information. The principal cannot verify the correctness of the information, so she must incentivize the agent to report truthfully. Previous works coped with this unverifiability by employing two or more information agents and awarding them according to the correlation between their reports. We show that, in a common value setting, the principal can elicit the true information even from a single information agent, and even when computing the value is costly for the agent. Moreover, the principal’s expense is only slightly higher than the cost of computing the value. For this purpose we provide three alternative mechanisms, all providing the same above guarantee, highlighting the advantages and disadvantages in each. Extensions of the basic mechanism include adaptations for cases such as when the principal and the agent value the object differently, when the object is divisible and when the agent’s cost of computation is unknown. Finally, we deal with the case where delivering the information to the principal incurs a cost. Here we show that substantial savings can be obtained in a multi-object setting. Keywords Information disclosure · Mechanism design · Asymmetric information · Principal–agent problem
A preliminary version appeared in the proceedings of AAMAS 2019. We are grateful to Tomer Sharbaf for participating in the preliminary version [38]. New in this version are: (a) handling objects that may have both a positive and a negative value. (b) handling the case where besides the information computation cost, the agent incurs an information delivery cost (Sect. 9), and therefore, the principal may want to elicit the true value only when it is above a certain threshold. (c) extending the section on different values (Sect. 6) by reducing the problem of minimizing the principal’s expense subject to revealing the true value into a substantially simpler form. (d) Adding examples based on real value data (Sect. 3) and simulations (Sect. 9). * Erel Segal‑Halevi [email protected] Shani Alkoby [email protected] David Sarne [email protected] 1
Ariel University, 40700 Ariel, Israel
2
Bar-Ilan University, 52900 Ramat Gan, Israel
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Autonomous Agents and Multi-Agent Systems
(2020) 34:46
1 Introduction Often you own a potentially valuable object, such as an antique, a jewel, a used car or a land-plot, but do not know its exact value and cannot calculate it yourself. There are various scenarios in which you may need to know the exact object value. For example: (a) You intend to sell the object and want to know how much to ask when negotiating with potential buyers. (b) You want to know how much to invest in an insurance policy covering that obj
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