Mechanism Design - A Primer
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 ...