A Truth Serum for Sharing Rewards

TL;DR

This paper introduces a mechanism for fairly sharing rewards based on subjective peer evaluations, ensuring incentive compatibility, budget balance, and truthfulness in large-agent settings.

Contribution

It proposes a novel mechanism that elicits and aggregates subjective opinions to determine fair reward shares, promoting truthfulness and fairness.

Findings

Mechanism is incentive-compatible, encouraging truthful reporting.

Ensures budget balance and tractability in large populations.

Provides strategies for individual rationality and fairness.

Abstract

We study a problem where a group of agents has to decide how a joint reward should be shared among them. We focus on settings where the share that each agent receives depends on the subjective opinions of its peers concerning that agent's contribution to the group. To this end, we introduce a mechanism to elicit and aggregate subjective opinions as well as for determining agents' shares. The intuition behind the proposed mechanism is that each agent who believes that the others are telling the truth has its expected share maximized to the extent that it is well-evaluated by its peers and that it is truthfully reporting its opinions. Under the assumptions that agents are Bayesian decision-makers and that the underlying population is sufficiently large, we show that our mechanism is incentive-compatible, budget-balanced, and tractable. We also present strategies to make this mechanism individually rational and fair.