The Exponential Mechanism for Social Welfare: Private, Truthful, and Nearly Optimal

TL;DR

This paper introduces a novel mechanism that achieves social welfare maximization while ensuring truthfulness and differential privacy, generalizing the VCG mechanism for broader applicability.

Contribution

It presents the first general method to design mechanisms that are both truthful and differentially private, extending the VCG mechanism framework.

Findings

The exponential mechanism can be implemented as a truthful, differentially private mechanism.

This approach generalizes the VCG mechanism as a special case with infinite privacy parameter.

Provides a new tool for privacy-preserving, truthful mechanism design.

Abstract

In this paper we show that for any mechanism design problem with the objective of maximizing social welfare, the exponential mechanism can be implemented as a truthful mechanism while still preserving differential privacy. Our instantiation of the exponential mechanism can be interpreted as a generalization of the VCG mechanism in the sense that the VCG mechanism is the extreme case when the privacy parameter goes to infinity. To our knowledge, this is the first general tool for designing mechanisms that are both truthful and differentially private.