1. 1 AI and Economics: The Dynamic Duo Ariel Procaccia Center for Research on Computation and Society Harvard SEAS AI AND ECONOMICS DYNAMIC DUO THE

2. 2 AI and Economics: The Dynamic Duo Theme The interaction between AI and economics leads to new paradigms that can change the way we think about fundamental issues in AI and in economics

3. 3 AI and Economics: The Dynamic Duo The Game Plan Game Theory Social choice Game Theory AI MAS ML UAI Planning econ KR

4. 4 AI and Economics: The Dynamic Duo Game Theory “Game theory is a sort of umbrella... for the rational side of social science, where ‘social’ is interpreted broadly” [Aumann 1987]

5. 5 AI and Economics: The Dynamic Duo Fun and Games › Chess › Poker [Sandholm+] › Pool [Shoham+]

6. 6 AI and Economics: The Dynamic Duo AI and Game Theory › GT offers: principles of rationality › AI offers: rational agents [Rosenschein+Genesereth, IJCAI’85] » GT  Planning: Planning games [Brafman+, IJCAI’09] › AI also offers: new ways of thinking about rationality » UAI  GT: Dynamic incentive mechanisms [Parkes+]

7. 7 AI and Economics: The Dynamic Duo Small Example: Incentives in ML AI econ Game Theory Social choice Game Theory AI Dekel+Fischer+P Incentive Compatible Regression Learning JCSS 2010 MAS ML UAI Planning KR ML

8. 8 AI and Economics: The Dynamic Duo Super Simplified model › Input space X › Each player i controls input point x i (public) and label y i  R (private) › Function class F of f:X  R › Given reported labels, choose a function f  F › Players want to minimize |f(x i )-y i | › Designer wants to minimize  i |f(x i )-y i |

9. 9 AI and Economics: The Dynamic Duo Let the Games Begin 5 5 1 1 2 2 3 3 4 4 4 4

10. 10 AI and Economics: The Dynamic Duo If the Shoe Fits › Strategyproof mechanism = player never gains from misreporting private information › Group strategyproof mechanism = members of coalition cannot all gain from misreporting private information › Theorem: Assuming one point per player and convex function class, best fit is group strategyproof » Follows immediately from known results for F = constant functions (single peaked preferences) » Nontrivial for general convex function classes

11. 11 AI and Economics: The Dynamic Duo Simplified model › Each player i controls input points x i1, x i2,... (public) and real labels y i1, y i2,... (private) › Players want to minimize  k |f(x ik )-y ik | › Designer wants to minimize  ik |f(x ik )-y ik |

12. 12 AI and Economics: The Dynamic Duo A Whole New Ball Game 2 2 1 1 1 1 1 1 2 2 1 1

13. 13 AI and Economics: The Dynamic Duo Project-and-Fit › Project-and-Fit: Project labels of each player onto closest fit, then fit with projected labels › SP and gives quality guarantees for some function classes

14. 14 AI and Economics: The Dynamic Duo Project-and-Fit Illustrated 1 1 2 2 2 2 2 2 1 1 1 1 1 1 1 1

15. 15 AI and Economics: The Dynamic Duo Slightly Simplified Model › Each player has a distribution  i over X and target function o i :X  R › Distributions sampled and labeled by players › Players want to minimize expected error wrt  i and o i › Designer wants to minimize expected error wrt average player › Theorem (informal): For any , , given enough samples, results from previous model carry over up to  with prob. 1- 

16. 16 AI and Economics: The Dynamic Duo Late Motivation: Zara › Optimizing distribution process of Zara [Caro+Gallien, OR 10] › Regression learning is used to predict demand based on orders from store managers › “... Zara’s inventory distribution process could be further improved in the future by introducing explicit incentives for the stores to contribute accurate forecasts.”

17. 17 AI and Economics: The Dynamic Duo Can GT Enable AI? › Classic AI seeks to design intelligent robots/agents › Some of modern AI studies agent societies › GT distills rationality › Rationality is perceived as intelligence › Game-theoretic MAS may be perceived as intelligent › GT enables AI on the multiagent level!

18. 18 AI and Economics: The Dynamic Duo The Game Plan Game Theory Social choice AI econ Social choice MAS ML UAI Planning KR

19. 19 AI and Economics: The Dynamic Duo Social Choice Theory Social choice theory is a theoretical framework for measuring individual interests, values, or welfares as an aggregate towards collective decision

20. 20 AI and Economics: The Dynamic Duo AI and Social Choice › CS + SC = computational social choice › SC offers: preference aggregation » SC  MAS: Restricted communication [Caragiannis+P, AAAI’10] › AI offers: complex preferences » KR  SC: Voting on multiattribute domains with CP-nets [Lang, IJCAI’07]

21. 21 AI and Economics: The Dynamic Duo The basics › Set of n voters: {1,...,n} › Voters are honest! › Set of m alternatives: {a,b,c,...} › Each voter ranks the alternatives › Preference profile = collection of rankings › Voting rule selects alternative given profile » Plurality: each voter awards one point to top alternative » Borda count: each voter awards m-k points to alternative ranked k’th

22. 22 AI and Economics: The Dynamic Duo Majority Consistency Voter 1 a a b b c c d d Voter 2 a a c c d d Voter 3 c c d d a a b b b b

23. 23 AI and Economics: The Dynamic Duo Big Example: Dynamic Social Choice Game Theory Social choice AI econ Social choice AI Parkes+P Dynamic Social Choice Working paper MAS ML UAI Planning KR UAI

24. 24 AI and Economics: The Dynamic Duo Motivation: MoveOn › Online public policy advocacy group › 5 million members, handful of staffers › Causes stem from preferences of members › Short time frames › Acting on a cause changes preferences, affecting next cause

25. 25 AI and Economics: The Dynamic Duo Social Choice MDPs b a b a a b a b a b b a a b a b a b b a b a b a a b b a a b b a a b b a b a a b a b a b b a b a a b b a a b b a a,1 b, ½ a,1 b, ½ a,0 b,½ a,½ b, ½ a,0 b, ½ a,0 b, ½ a, ½ b, ½ a, 1 b, ½ Voters 1+2Voter 3 ½ ½ ½½11 ½ ½ ½½11

26. 26 AI and Economics: The Dynamic Duo Rewards and Policies › MDP components: states, actions, transitions, rewards › Reward function specifies (designer’s) reward for each state and action » Favorite alternative » Social consensus › (Deterministic stationary) policy selects action/alternative at each state/profile

27. 27 AI and Economics: The Dynamic Duo Take-Home Message “A policy in a social choice MDP is a voting rule”

28. 28 AI and Economics: The Dynamic Duo Rewards and Policies › MDP components: states, actions, transitions, rewards › Reward function specifies (center’s) reward for each state and action » Favorite alternative » Social consensus › (Deterministic stationary) policy selects action/alternative at each state/profile › Maximize infinite sum of discounted rewards... ›... subject to social choice constraints!

29. 29 AI and Economics: The Dynamic Duo ½ ½1 Exploiting Symmetries › In general finding an optimal policy is easy › First obstacle: state space is exponential in n and m › Assume constant m and constant #transition models › Contract symmetric states [Dean+Givan AAAI’97] b a b a a b a b a b b a a b a b a b b a b a b a a b b a a b b a a b b a b a a b a b a b b a b a ½ ½ ½½11 ½ ½ ½½11

30. 30 AI and Economics: The Dynamic Duo Social Choice Constraints › Second obstacle: constraints » Literature falls short › Theorem: Assume a constant m and constant #transition models. Can compute an optimal policy subject to axiom in poly time in n » axiom  {majority consistency, ontoness,...} › Example: Ontoness

31. 31 AI and Economics: The Dynamic Duo Algorithm by Animation a a b b c c c c b b a a b b a a a a b b a a a a a a a a a a a a b b a a b b a a b b a a b b b b b b b b b b b b b b

32. 32 AI and Economics: The Dynamic Duo Implementation › Challenges » Developing transition models » Practical heuristics › Extend to dynamic voters and alternatives

33. 33 AI and Economics: The Dynamic Duo CS and SC: Yin and Yang

34. 34 AI and Economics: The Dynamic Duo A New Hope › Classic SC is rife with impossibilities › Computational social choice is constructive and positive › AI is a testbed for principles of SC » Via MAS » Via human computation › Does classic SC literature have “operational value”?

35. 35 AI and Economics: The Dynamic Duo back to theme The interaction between AI and economics leads to new paradigms that can change the way we think about fundamental issues in AI and in economics

36. 36 AI and Economics: The Dynamic Duo Research Overview › AI + Computational GT and SC › Fair division › Combinatorial optimization and approximation algorithms › Crowdsourcing and human computation

37. 37 AI and Economics: The Dynamic Duo The End Thank You!