Faithful Implementations of Distributed Algorithms and Control Laws
Takashi Tanaka (Laboratory for Information and Decision Systems, Massachusetts Institute of Technology)
Time: Wed 2013-12-04 14.00 - 15.00
Location: AC meeting room, floor 6, Osquldas väg 10.
Abstract: When a distributed algorithm is executed by strategic agents whose interests are to minimize their own individual costs, it is important for a social leader to properly incentivise them to faithfully execute the intended algorithm, so that the socially optimal outcome is obtained. It is well known in mechanism design theory that this requires a careful tax/subsidy design. In this talk, we review the (algorithmic) mechanism design framework and show that a variant of the classical Vickrey-Clarke-Groves mechanism can be used for this purpose. We also propose a mechanism for multi-stage decision making processes in which strategic agents are incentivesed to execute intended distributed algorithm at every stage. As an application, we consider how a real-time power market is able to generate the socially optimal dispatch in the presence of strategic market participants.