Distributed Algorithmic Mechanism Design (DAMD) combines theoretical computer science’s traditional focus on computational tractability with its more recent interest in incentive compatibility and distributed computing. The Internet’s decentralized nature, in which distributed computation and autonomous agents prevail, makes DAMD a very natural approach for many Internet problems. This paper first outlines the basics of DAMD and then reviews previous DAMD results on multicast cost sharing and interdomain routing. The remainder of the paper describes several promising research directions and poses some specific open problems.

Generalized Vickrey mechanisms have received wide attention in the literature because they are efficient and strategyproof, i.e. truthful bidding is optimal whatever the bids of other agents. However it is well-known that it is impossible for an exchange, with multiple buyers and sellers, to be efficient and budget-balanced, even putting strategy-proofness to one side. A market-maker in an efficient exchange must make more payments than it collects. We enforce budget-balance as a hard constraint, and explore payment rules to distribute surplus after an exchange clears to minimize distance to Vickrey payments. Different rules lead to different levels of truthrevelation and efficiency. Experimental and theoretical analysis suggest a simple Threshold scheme, which gives surplus to agents with payments further than a certain threshold value from their Vickrey payments. The scheme appears able to exploit agent uncertainty about bids from other agents to reduce manipulation and boost allocative efficiency in comparison with other simple rules.

The implementation problem is the problem of designing a mechanism (game form) such that the equilibrium outcomes satisfy some criterion of social optimality. The early literature assumed that each agent would simply report his

We consider rules that choose a location on a graph (e.g. a road network) based on agents ’ single-peaked preferences. First, we characterize the class of strategy-proof, onto rules when the graph is a tree. Such a rule is based on a collection of generalized median voter rules (Moulin, 1980) satisfying a consistency condition. Second, we characterize such rules for graphs containing cycles. We show that while such a rule is not necessarily dictatorial, the existence of a cycle grants some agent an amount of decisive power, unlike the case of trees. Rules for this case can be described in terms of a subclass of such rules for trees. Journal of Economic Literature Classification

We address the problem of learning and implementation in the Internet. When agents play repeated games in distributed environments like the Internet, they have very limited a priori information about the other players and the payo matrix. Consequently, standard solution concepts like Nash equilibria, or even the serially undominated set, do not apply in such a setting. To construct more appropriate solution concepts, we rst describe the essential properties that constitute \reasonable " learning behavior in distributed environments. We then study the convergence behavior of such algorithms; these results lead us to propose rather non traditional solutions concepts for this context. Finally, we discuss implementation of social choice functions with these solution concepts, and nd that only strictly coalitionally strategyproof social choice functions are implementable. 1 1

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In the traditional static implementation literature it is often impossible for implementors to enforce their optimal outcomes. And when restricting the choice to dominant-strategy implementation, only the dictatorial choices of one of the participants are implementable. Repeated implementation problems are drastically different. In this paper we provide an implementation "folk theorem": for patient implementors, every outcome function they care about is dominant-strategy implementable.

We consider the Shapley-Scarf house allocation problem where monetary transfers are allowed. We characterize the class of mechanisms that are strategy-proof, ex post individually rational, ex post budget balanced, and “collusion-proof.” In these mechanisms, the price of each object is fixed in advance, and the objects are reallocated according to the (unique) core assignment of the Shapley-Scarf economy associated with the prices. The special case in which all prices are zero is the core mechanism studied by Shapley and Scarf. Our mechanisms are compelling alternatives to the Groves mechanisms, which satisfy neither budget balance nor our condition of collusion-proofness.

We consider the problem of allocating finitely many units of an indivisible good among a group of agents when each agent receives at most one unit of the good and pays a non-negative price. For example, imagine that a government allocates a fixed number of licenses to private firms, or that it distributes equally divided lands to households. Anonymity in welfare is a condition of impartiality in the sense that it requires allocation rules to treat agents equally in welfare terms from the viewpoint of agents who are ignorant of their own valuations or identities. We show that the Vickrey allocation rule is the unique allocation rule satisfying strategy-proofness, anonymity in welfare, andindividual rationality.

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