Peer Selection in a Network: A Mechanism Design Approach

Francis Bloch, Marcin Dziubinsk and Bhaskar Dutta
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Francis Bloch: Universite Paris 1 and Paris School of Economics
Marcin Dziubinsk: Institute of Informatics, University of Warsaw
Bhaskar Dutta: University of Warwick and Ashoka University

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: A planner wants to select one agent out of n agents on the basis of a binary characteristic that is commonly known to all agents but is not observed by the planner. Any pair of agents can either be friends or enemies or impartials of each other. An individual's most preferred outcome is that she be selected. If she is not selected, then she would prefer that a friend be selected, and if neither she herself or a friend is selected, then she would prefer that an impartial agent be selected. Finally, her least preferred outcome is that an enemy be selected. The planner wants to design a dominant strategy incentive compatible mechanism in order to be able choose a desirable agent. We derive sufficient conditions for existence of efficient and DSIC mechanisms when the planner knows the bilateral relationships between agents. We also show that if the planner does not know the network these relationships, then there is no efficient and DSIC mechanism and we compare the relative efficiency of two second-best DSIC mechanisms. Finally, we obtain sharp characterization results when the network of friends and enemies satisfies structural balance.

Keywords: Peer selection; Network, Mechanism design without money; Dominant strategy incentive compatibility (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1571

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