1. Trust Based Mechanism Design

2. Use MD

3. Motivation Fuse the fields of trust-modelling and mechanism design Trust measures how good an interaction partner is Mechanism design concerns itself with the allocation of resources.

4. Deciding on a service provider Garage X is better than Y Garage Y is better than X! X Y pr i ce X pr i ce Y

5. Motivation WHICH GARAGE TO EMPLOY? X Y

6. Mechanism Design The design of systems of interacting agents –Protocols (allocation + payment schemes) to ensure that certain global properties are achieved at equilibrium (game-theoretic). –Selfish, rational agents possessing private information i.e. each agent maximises its utility function given its type.

7. Task Allocation Agent 4 wants a task to be completed. Problem –Who to allocate task to ? –How much to pay task performer ? Solution -VCG mechanism

8. Applying VCG Centre Ask(£80,task1) (£210,task1) Ask(£50,task1) Allocate task to 1, 4 pays 1 £50 1 2 4 Ask(£40,task1) 3

9. Class of mechanisms satisfying –Efficiency – outcome maximising utility for all agents –Individually rationality – incentivise participation –Incentive compatibility – incentivise truthful report under dominant strategy: Works by: –Allocation : choose allocation maximising utility –Payment : charge marginal utility contributed by agent VCG Mechanism

10. Cheapest not always best …..

11. Adding uncertainties Suppose that agent 4 has formulated a belief about the Probability of Success (POS) of other agents. Agent i 1 400.52 5 70.25 2 801.0130 3 500.85128.5 4 n/a C i ´ i 4 E [ v 4 ( K ; µ 4 )]

12. Trust So far : one’s own experience. Would be better to factor in others’ experiences as well. –First time agent –Greater pool of experience for seasoned user. Trust a way of aggregating everyone’s experience

13. Our model of trust Each time a task is performed, record POS Publicly transmit the POS to other agents Trust –Use a simple averaging function over reports from all agents –Give more weight to more trusted referrals, or agents with similar properties 1 2 3 4 Record POS Transmit POS

14. Incorporate Trust Agent i 1 400.41.00.850.565 2 800.61.00.91.0130 3 500.51.00.90.87132.7 4 0.5251.00.85na ´ 1 i ´ 2 i ´ 3 i 1 t i 4 E [ v 4 ( j ; µ 4 )] ® = [ 0 : 30 : 20 : 10 : 4 ] ; v 4 ( ¿ ) = 210 c i

15. TBMD Centre (£210,task1) Trust model c 1 = 40 ´ i 3 ´ i 2 c 2 = 80 ´ i 1 c 3 = 50 ´ i 4 12 3 4 transmits to centre -- value of task, observed POS and trust model1, 2, 3 transmit to centre -- cost of doing task and observed POSCentre calculates optimal allocation b K ¤ 4

16. TBMD Centre (£210,task1) Trust model c 1 = 40 ´ i 3 ´ i 2 c 2 = 80 ´ i 1 c 3 = 50 ´ i 4 12 3 D i = U ( b K ¤ ;: ) ¡ U ( K ¤ ¡ i ;: ) 4 Centre calculates optimal allocation without each agent i’s POS report. K ¤ ¡ i

17. TBMD Centre (£210,task1) Trust model c 1 = 40 ´ i 3 ´ i 2 c 2 = 80 ´ i 1 c 3 = 50 ´ i 4 12 3 Centre calculates transfer to i, r i = mc i ¡ D i 4 r i K ¤ ;

18. Steps in TBMD

19. Trust Based Mechanism Design (TBMD) An individually rational and efficient ICDR mechanism that can also select those agents that are most successful at their task

20. Experimental Setup Set of buyers and sellers. Biased (but truthful!) report from seller. Buyers attach different levels of importance to seller’s report.

21. Results K*FTM K*TBM 0.5 K*VCG K* K*TBM 0.25 K*TBM

22. Conclusions Task allocation with uncertainty. Only incentive-compatible, individually-rational efficient reputation mechanism. Works with a very large class of trust models.

23. End Any Questions? rkd02r@ecs.soton.ac.uk