Game-Theory

Imagine the large scale deployment of AI agents that make decisions on behalf of individuals or firms. For example, in online advertising auctions, an advertiser gives their high-level goal and constraints to a personal bidding agent. The responsibility of the bidding agent is to convert the advertiser’s goal and constraints into per-auction bids without human review. How do we ensure: (1) the advertiser’s goal is maximized, and (2) the outcome (who wins the auction) is efficient? ...

This post is an ongoing investigation of my alternative view of AI and the role of algorithms for multi-agent systems in markets. Game theory is concerned with predicting the behavior of agents participating in an strategic interaction. We can also ask the inverse. Given a desired behavior of the agents, what strategic interaction would give rise to this behavior? For example, there are two firms $A$ and $B$. Each firm can choose to cooperate $C$ or defect $D$ which results in the following payoff matrix ...