Incentive-compatible distributed greedy protocols

Noam Nisan, Michael Schapira, Gregory Valiant, Aviv Zohar

Abstract: Under many distributed protocols, the prescribed behavior for participants is to behave greedily, i.e., to repeatedly "best respond" to the others' actions. We present recent work (Proc. ICS'11) where we tackle the following general question: "When is it best for a long-sighted participant to adhere to a distributed greedy protocol?". We take a game-theoretic approach and exhibit a class of games where greedy behavior (i.e., repeated best-response) is incentive compatible for all players. We identify several environments of interest that fall within this class, thus establishing the incentive compatibility of the natural distributed greedy protocol for each. These environments include models of the Border Gateway Protocol (BGP) [4], which handles routing on the Internet, and of the Transmission Control Protocol (TCP) [3], and also stable-roommates assignments [2] and cost-sharing [5], which have been extensively studied in economic theory.