Stability Scores: Measuring Coalitional Stability

TL;DR

This paper introduces stability scores to measure coalitional stability in games, compares different auction equilibria, and proposes a modified VCG auction with maximal stability.

Contribution

It generalizes stability notions, applies them to ad auctions, and introduces a group strategy-proof VCG variant with highest stability score.

Findings

GSP outcomes are more stable than VCG in certain equilibria.

Stability scores quantify coalitional deviations effectively.

Modified VCG achieves maximum stability and group strategy-proofness.

Abstract

We introduce a measure for the level of stability against coalitional deviations, called \emph{stability scores}, which generalizes widely used notions of stability in non-cooperative games. We use the proposed measure to compare various Nash equilibria in congestion games, and to quantify the effect of game parameters on coalitional stability. For our main results, we apply stability scores to analyze and compare the Generalized Second Price (GSP) and Vickrey-Clarke-Groves (VCG) ad auctions. We show that while a central result of the ad auctions literature is that the GSP and VCG auctions implement the same outcome in one of the equilibria of GSP, the GSP outcome is far more stable. Finally, a modified version of VCG is introduced, which is group strategy-proof, and thereby achieves the highest possible stability score.