Abstract

We consider the amount of communication required to implement a given decision rule when the mechanism must be ex post or Bayesian incentive compatible. In ex post incentive compatibility, the communication protocol must reveal enough information to calculate monetary transfers to the agents to motivate them to be honest (agents ’ payoffs areassumedtobequasilinear in such transfers). For Bayesian incentive compatibility, the protocol may need to hide some information from the agents to prevent deviations contingent on the information. In both cases, the selfishness of the agents can substancially increase the communication costs. We provide an exponential upper bound on the communication cost of selfishness, which is tight in the Bayesian setting. Whether this exponential upper bound is ever achieved in the ex post setting remains an open question. We examine some extensions of our initial setting. In particular we show that for the average-case communication complexity measure, the communication cost of selfishness may be arbitrarily large in both ex post and Bayesian settings. We also examine some special cases in which the communication cost of selfishness proves to be very low, in particular when we want to implement efficiency. 1

Citations