Mechanism Design

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10 papers in the last four weeks, up 150% on the four weeks before. 0.1% of all new papers.

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Latest papers 93

Jul 2, 2026cs.MA

Congestion-Based Slot Pricing in a Railway Auction Game

We present a multi-agent system for studying the allocation of discrete, congested resources among heterogeneous strategic agents, motivated by the problem of railway slot allocation under deregulation. Multiple operator-agents, differing in size and capacity, interact through a shared auction mechanism over repeated rounds under time-constrained decision-making. The mechanism combines a congestion-based base price that increases with aggregate demand with an asymmetric corrective adjustment that penalises the agent requesting the most slots and rewards the agent requesting the fewest, and is designed to mitigate strategic dominance by large agents while preserving transparency and congestion sensitivity. We formulate the interaction as a repeated game with incomplete information and implement the system as a real-time, web-based multi-agent environment in which human participants control individual agents and observe live marginal-cost and competitor feedback. We report exploratory observations from two structured sessions with domain experts acting as operator-agents. The congestion mechanism responds to aggregate demand as designed and the corrective incentives are actively triggered, but agents representing large operators persist with high-request strategies despite the penalty, suggesting that corrective pricing is necessary but not sufficient to neutralise strategic dominance in this multi-agent setting. A post-session debrief indicates that participants' decisions were driven by the assumed agent role rather than personal disposition, and provides qualitative support for strategic motives, such as preserving market presence and raising rivals' costs, operating alongside short-term profit maximisation. We discuss implications for multi-agent mechanism design under asymmetric budgets and outline directions for analytical validation and larger-scale multi-agent experiments.

Bill Roungas, Sebastiaan Meijer

Panteion University, Athens, Greece · Institute of Communication and Computer Systems, Athens, Greece · KTH Royal Institute of Technology, Stockholm, Sweden

Mechanism Design Game-Playing Agents Repeated Games Dynamic Pricing Online Resource Allocation

Jul 1, 2026cs.CY

What's a Credit Worth? A Market Framework for Attribution-Aware Compensation in Generative Music

Advances in generative AI are rapidly increasing the quality and commercial value of generated music, and this progress depends on large catalogs of creators' recordings. This raises a central question for platform design: how should creators be compensated when their work is used to train generative AI models that in turn produce commercial outputs? We develop a framework for fairly compensating creators in generative-music markets, where each creator's payment depends on a data-attribution score estimating their contribution to model outputs. Compared to past compensation frameworks, our framework has two unique considerations: (1) attribution is traced to entire creator catalogs, not individual songs, and (2) the informativeness (signal-to-noise ratio) of the attribution score is an input to the payment mechanism. The framework yields a closed-form payment rule per creator and measures the welfare cost of inaccurate attribution for both creators and the platform. Whether the welfare-optimal contract is royalty-based or takes the form of fixed-fee licensing depends on how informative attribution is for that creator's catalog. We show that better attribution translates directly into welfare gains for both creators and the platform, yet under multi-platform competition a platform only captures gains from attribution improvements when its signal becomes the most precise in the market. To ground our framework in empirical behavior, we train acoustic and symbolic music generation models and measure the informativeness of scalable attribution techniques against a leave-one-catalog-out ground truth. Our experiments reveal that noisy attribution signals push payment toward fixed-fee licensing and diminish welfare for both creators and the platform, providing an economic motivation for further research on improved attribution.

Luyang Zhang, Xirui Jiang, Junwei Deng +3

Carnegie Mellon University · University of Michigan, Ann Arbor · University of Illinois Urbana-Champaign

Mechanism Design Data Valuation Training Data Attribution

Jun 27, 2026cs.GT

Pure Nash Equilibria under the Affine Mechanism: A Potential Game of Exaggeration

The mean mechanism is known to be non-incentive-compatible, namely, rational players are incentivized to misreport their values. Despite this game-theoretic issue, the mean mechanism is prevalent in practice due to its other desirable properties. We give a full characterization of pure Nash equilibria--how the players will misreport--for the affine mechanism, of which the mean is a special case. Furthermore, we characterize both complete-information and Bayesian games under the affine mechanism. Our results highlight the inevitability of extreme exaggeration in such games.

Jason Jisen Li, Young Wu, Yancheng Zhu +2

University of Wisconsin - Madison

Nash Equilibrium Mechanism Design Potential Games

Jun 23, 2026cs.RO

Wear-Clearance-Impact Coupling in the Jansen Linkage: A Gait-Durability-Optimized Design Slows Joint Loosening

A companion study introduced joint durability into the dimensional design of the Theo Jansen walking linkage and found its classical "holy numbers" Pareto-dominated, but it modelled the revolute joints as ideal, clearance-free pins, so its wear figures were relative rankings, not a prediction of in-service degradation. Here we relax that idealization. We build a forward-dynamic model of the Jansen leg in which a revolute joint becomes a clearance joint with a continuous normal contact law (Lankarani-Flores, hysteresis-damped) and Ambrosio friction, integrated as a constraint-stabilized differential-algebraic system, and couple it to the Archard law in a wear->clearance->impact feedback loop. Three findings emerge. First, neglecting clearance underestimates the peak joint load: the clearance model gives a peak contact force of ~104 N at the load-bearing pin against ~48 N for the ideal joint (~2x amplification), rising to ~426 N when two joints carry clearance at once. Second, the coupling is strongly impact-sensitive--single trajectories are non-monotonic and can reverse the design ranking, a chaos consistent with the literature--so designs must be compared statistically; over an ensemble of 16 randomized phases the optimized joint is robustly more durable, with per-cycle wear ~9-7x lower (peak force ~4x lower) at one clearance joint and still ~1.7x lower on both with two (p<0.01 throughout). Third, the wear is strongly non-uniform--it concentrates on a ~10 deg load arc--so assuming uniform clearance growth underestimates local clearance growth by ~36x. The clearance-free durability advantage thus survives the chaotic, multi-joint, non-uniformly-worn coupling in the ensemble mean. We deliver the first clearance-coupled forward-dynamic model of the Jansen leg and specify a falsifiable protocol to test each prediction.

Jichao Wang

Independent Researcher

Mechanism Design Robot Locomotion

Jun 20, 2026cs.RO

Durability-Aware Multi-Objective Optimization of the Jansen Linkage: Trading Gait Quality Against Joint Wear

The Jansen linkage is a single-degree-of-freedom planar leg mechanism whose eleven "holy numbers" were evolved by Theo Jansen to optimize the foot-path gait alone, with no regard for the wear of its revolute joints. This paper introduces a durability objective into the design of the Jansen leg. A parametric forward-kinematic model (two-circle-intersection solver), an inverse-dynamic model (constraint-Jacobian / Lagrange-multiplier formulation of a seven-body, ten-joint system, independently cross-verified by a reduced-DOF energy method), and an Archard wear model are coupled to evaluate, for any set of link lengths, both gait quality and the per-cycle sliding wear at every pin. Because the wear is computed on ideal, clearance-free revolute joints, the resulting wear figures are a relative comparative ranking rather than an absolute life prediction. A bi-objective problem -- composite gait error versus total joint wear, subject to step-length, ground-clearance, duty-factor and assembly constraints -- is solved with NSGA-II. Under the adopted gait metric the classical Jansen design is Pareto-dominated: for a representative design, link-length adjustments within +/-29% simultaneously flatten the stance (-28%), smooth the stance velocity (-58%) and reduce total joint wear by ~56%. A sensitivity study shows the wear advantage is robust across a crank-speed x payload envelope (48%-56%) and identifies the link lengths that most strongly govern wear. A variance-based global (Sobol) analysis confirms that two link lengths dominate the wear variance, and a Monte-Carlo manufacturing-tolerance study shows the wear advantage degrades gracefully under realistic fabrication error. The framework provides a practical route to longer-lived walking linkages and a baseline for future wear-clearance-impact coupled studies.

Jichao Wang

Independent Researcher

Mechanism Design Robot Locomotion Multi-Objective Optimization

Jun 20, 2026cs.RO

Dynamics, stability, and energy efficiency of an energy-recycling rimless wheel with spring-clutch legs

This paper proposes an energy-recycling rimless wheel with spring-clutch legs. The proposed mechanism uses a lockable clutch to store part of the impact-induced elastic energy after foot contact and reinject it in the next gait cycle. First, we develop a hybrid dynamic model of the energy-recycling rimless wheel. Second, numerical simulations are used to examine the dynamics, local stability of periodic gaits, and the Cost of Transport (CoT) of the proposed mechanism. The simulation results show that the proposed mechanism reduces the CoT by up to 16.13% compared with a benchmark viscoelastic-legged rimless wheel with telescopic spring-damper legs. Compared with the rigid rimless wheel, the viscoelastic-legged and energy-recycling models reduce the CoT by more than 50%. The energy-recycling model also maintains locally stable periodic gaits over the tested slope and stiffness ranges. Finally, prototype experiments on an inclined plane are conducted to examine the feasibility of the proposed mechanism. The experimental results show that the proposed rimless wheel achieves passive walking on a shallow 1° slope, corresponding to a CoT of approximately 0.02. These results suggest that the proposed spring-clutch mechanism can improve the simulated walking efficiency of the energy-recycling rimless wheel, while the prototype experiments support the feasibility of passive walking with the mechanism.

Tongchen Lin, Yanqiu Zheng, Chuhan Zhang +3

Department of Mechanical Engineering and Robotics, Guangdong Technion-Israel Institute of Technology, Shantou, China. · Department of Applied Electronics, Faculty of Advanced Engineering, Tokyo University of Science, Tokyo, Japan. · Tongchen Lin, Chuhan Zhang, Ruigang Chen, Yizhar Or, and Mingyi Liu: Faculty of Mechanical Engineering, Technion-Israel Institute of Technology, Haifa, Israel.

Legged Robotics Mechanism Design Energy-Efficient Robot Locomotion Robot Locomotion

Jun 16, 2026cs.LG

SCOPE-FL: A Strategy-proof Chain-based Optimal pareto efficient Federated Learning System

Hierarchical Federated Learning (HFL) enables scalable collaborative model training across distributed devices while preserving data privacy. However, existing HFL client selection mechanisms suffer from a fundamental strategic inefficiency. By prioritizing stability over Pareto efficiency (PE), they produce suboptimal resource allocations, and without strategy proofness (SP), participants are incentivized to misrepresent their true preferences, both failures degrading system overall welfare in the Pareto sense in practice. To address it, we propose SCOPE-FL (Strategy-proof Chain-based Optimal pareto efficient Federated Learning), a synchronous HFL framework that formulates client selection as a two-sided school choice problem solved through the Top Trading Cycle (TTC) algorithm that simultaneously guarantees PE and SP. For reward distribution, SCOPE-FL employs a scalable Shapley value approximation based on One-Round Reconstruction (OR), ensuring compensation proportional to each client's contribution. The entire mechanism executes via blockchain smart contracts, providing the tamper-proof environment required for the SP guarantees to hold in practice. A comprehensive evaluation on MNIST, Fashion-MNIST, and CIFAR-10 demonstrates that SCOPE-FL outperforms state-of-the-art approaches, including DA, IAS, and other methods across model accuracy, convergence rate, and reward efficiency, while achieving communication latency comparable to DA and blockchain overhead significantly lower than DA at scale.

Seyed Salar Ghazi, Kaiwen Zhang, Mehdi feizi +1

Department of Software and IT Engineering, École de Technologie Supérieure (ÉTS), Montréal, QC H3C 1K3, Canada · Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran · Department of Electrical and Computer Engineering, University of Toronto, Toronto, ON M5S 3G4, Canada

Hierarchical Federated Learning Mechanism Design Client Selection in Federated Learning Federated Learning

Jun 15, 2026cs.GT

Gaming-Resistant Insurance Contracts for Autonomous AI Agents: Strategy-Proof Toll Mechanism Design

Paper A defines a time-consistent actuarial runtime that prices each side-effect-bearing action against a contractually fixed safe default and gates execution against a reserve budget. It treats the operator as passive. This paper makes the operator strategic. We characterise a five-attack space for autonomous AI-agent insurance contracts and prove when the actuarial runtime is gaming-resistant. Two attack surfaces -- post-toll safe-default selection and within-boundary action splitting -- are closed by Paper A's minimal-authority and no-splitting clauses. The remaining three require new contract clauses. First, common-control aggregation prevents cross-boundary re-routing from reducing toll below the boundary potential applied to total exposure. Second, interface failures such as invalid JSON are contract-relevant events, not safety wins: treating them as zero-toll safe defaults can reward unreliable models, while escalation fees reverse the incentive. We validate this interface-compliance theorem on committed cross-model traces from the companion empirical paper. Third, a model-identity menu with a componentwise-minimum penalty schedule makes truthful reporting of the deployed model weakly dominant. We then compose these clauses with Paper A's runtime guarantees to obtain joint incentive compatibility over the five-attack space. Finally, a two-parameter premium family discharges operator individual rationality and weak budget balance at the truthful equilibrium. The result is an incentive-compatibility layer for actuarial control of autonomous-agent side effects.

Hao-Hsuan Chen

Mechanism Design AI Risk Management AI Agent Safety AI Agent Governance

Jun 14, 2026cs.RO

Friction Characterization of a Cable-Driven Differential Actuation System for Lower-Limb Exoskeletons

Lower-limb exoskeletons require actuation systems that can provide accurate joint torque control while preserving low mass and encumbrance. Conventional architectures often rely on independently actuated joints and joint-level torque sensors, increasing system complexity and weight. This paper presents a novel differential actuation architecture for hip-knee flexion/extension, enabling cooperative torque sharing between two motors via a linear differential mapping between motor and joint. To compensate for transmission losses, a model-based friction estimation strategy is developed and experimentally implemented, allowing accurate joint torque estimation without the need for torque sensors. The proposed solution is validated on a physical prototype, demonstrating the feasibility of sensorless torque estimation in a differentially actuated hip-knee module of a lower-limb exoskeleton.

Alberto Maria Nobili, Fabio Salsedo, Alessandro Filippeschi

Institute of Mechanical Intelligence and with the Department of Excellence in Robotics and AI, Sant’Anna School of Advanced Studies, Pisa, Italy · Wearable Robotics s.r.l., Pisa, Italy

Mechanism Design Robotics Assistive Robotics Tendon-Driven Actuation

Jun 13, 2026cs.LG

Repeated Bilateral Trade: The Quest for Fairness

We study repeated bilateral trade from a fairness perspective. At each round, a fresh seller-buyer pair arrives, and the platform posts a price before observing the traders' valuations. Trade occurs only if both agents accept the price. Rather than maximizing only the gain from trade, we consider platforms that seek balanced divisions of the generated surplus. We show that natural fairness desiderata lead to a one-parameter Rawls-to-Nash family of fair-gain objectives, obtained by aggregating the seller's and buyer's net gains through nonpositive Hölder means. Unlike the standard gain-from-trade objective and the Rawlsian fair-gain objective studied in prior work, our proposed objectives induce a new statistical structure in which expected rewards are recovered from threshold feedback through a two-dimensional singular-kernel integral identity. This leads to a nonstandard pure-exploration problem whose natural estimators are rectangular double sums with row-column dependence and singular weights. Assuming independent i.i.d. seller and buyer valuation sequences with arbitrary unknown marginals, we characterize the optimal learning rates for the whole Rawls-to-Nash family of fair-gain objectives, giving matching fixed-confidence sample-complexity and regret bounds up to polylogarithmic factors.

François Bachoc, Roberto Colomboni, Emilie Kaufmann

University of Lille Institut Universitaire de France (IUF) Lille, France · School of Mathematics University of Bristol Fry Building, Woodland Road Bristol BS8 1UG, United Kingdom · Univ. Lille, CNRS, Inria, Centrale Lille, UMR 9189-CRIStAL F-59000 Lille, France

Mechanism Design Algorithmic Fairness RL Exploration

Jun 10, 2026econ.TH

Market Design for AI: Beyond the Copyright Binary

How can we design a market of human-generated content for use in training AI models that both enables technological progress and preserves individual incentives for high-quality content creation? Existing approaches take polar positions: a "free-for-all" model based on fair use and a "strong intellectual property rights" model. We show that both fail: Free-for-all does not compensate creators, and -- by modeling as a static Stackelberg game -- strong intellectual property rights also underpower creative incentives. We find this especially true for more innovative creators, a phenomenon we term the "originality penalty." Extending this insight to a dynamic model, we find another market failure undermining AI model performance, even for an initially good model: Such a model induces greater reliance by humans on AI-assisted creation, resulting in homogenized content feeding back into training, which degrades the model performance -- a "curse of precision." We further propose a market design with a data intermediary internalizing cross-creator externalities and subsidizing innovative contributions, thereby restoring efficiency.

Yan Dai, Maryam Farboodi, Negin Golrezaei +1

MIT Operations Research Center. · MIT Sloan School of Management, NBER and CEPR. · NBER and CEPR. +2

Mechanism Design AI Governance Human-AI Co-Creation

Jun 3, 2026cs.AI

R-APS: Compositional Reasoning and In-Context Meta-Learning for Constrained Design via Reflective Adversarial Pareto Search

Large language models (LLMs) are fluent on open-ended tasks, yet in agentic settings, where a system must plan, use tools, and act over extended horizons, fluency does not ensure reliable delivery. We trace this gap to three coupled structural failures: errors propagate without localization, worst-case perturbations go unevaluated, and accumulated knowledge is never invalidated. We argue these share a root cause: abductive, counterfactual, meta-inductive, corrective, and inductive reasoning pull a shared context in incompatible directions. We introduce Reflective Adversarial Pareto Search (R-APS), to our knowledge the first method addressing all three failures jointly via reasoning-mode decomposition, allocating each reasoning mode its own context and orchestrating interaction across three timescales: staged compositional reasoning with a typed validation critic (failure localization), sensitivity-guided counterfactual stress-testing as a first-class Pareto objective (robustness), and meta-inductive rule extraction with explicit invalidation (persistent memory). R-APS requires no fine-tuning and operates on a frozen LLM purely via structured protocol design. We evaluate on planar mechanism synthesis (robotics, prosthetics, mechanical design), with every candidate checked by a kinematic solver. On 32 target trajectories, R-APS delivers robustness certificates 3.5x tighter than uniform-perturbation baselines, 46% faster iterations-to-first-admission, and 2.1x Chamfer-distance reduction over Enum+GA while jointly controlling bar-count and worst-case robustness. Small 4B reasoning-specialized models prove competitive with general-purpose 70B backbones inside the protocol, suggesting structured protocols can partially offset model scale.

João Pedro Gandarela, Thiago Rios, Stefan Menzel +1

Idiap Research Institute, Switzerland · École Polytechnique Fédérale de Lausanne (EPFL), Switzerland · Honda Research Institute Europe, Germany +2

Mechanism Design Meta-Learning Compositional Reasoning Constrained Optimization

Jun 1, 2026math.OC

A No-Regret Framework for Adaptive Incentive Design

Incentive design studies how a central authority can influence strategic agents through payments, subsidies, or taxes, so that individual objectives align with collective welfare. This paper introduces a No-Regret Adaptive Incentive Design (RAID) framework for nonlinear games with continuous action spaces and private agent costs. In this framework, the authority (planner) designs incentives that regulate the Nash equilibrium toward a socially optimal action profile, while simultaneously learning agents' unknown preferences from repeated strategic responses. We formulate the RAID problem and construct a least-squares estimator whose strong consistency requires only diminishing excitation. Leveraging this weak excitation requirement, we propose a switching incentive policy that alternates between probing (exploration) and estimate-based (exploitation) incentives. The resulting policy achieves an

O(t^{-0.5})

parameter estimation rate and accumulates

O(t^{0.5}\log t)

squared social-cost regret, almost surely. We further extend the framework to an endogenous-noise response model, where standard least-squares estimation is biased due to an error-in-variables correlation between the noise and agent responses. We utilize a repeated-sampling estimator and corresponding switching policy that retain the same almost-sure convergence and regret rates. Numerical experiments validate the effectiveness and predicted convergence rates of the method.

Georgios Vasileiou, Lantian Zhang, Silun Zhang

Department of Mathematics, KTH Royal Institute of Technology, Stockholm, 10044, Sweden.

Mechanism Design Game Theory Regret Minimization

May 30, 2026cs.LG

Partial Fairness Awareness: Belief-Guided Strategic Mechanism for Strategic Agents

Strategic machine learning investigates scenarios where agents manipulate their features to receive favorable decisions from predictive models. To address fairness concerns intrinsic to strategic classification, recent work has introduced group-specific fairness constraints. However, current fairness-aware approaches face a fundamental dilemma in the issue of fairness exposure: making these constraints public enables strategic manipulation and can lead to fairness reversal, while keeping them hidden may reduce social welfare and discourage genuine improvement. To fill this gap, we subsequently propose the problem of partial fairness awareness (PFA), as our theoretical analysis informs that such a dilemma can be mitigated by releasing the candidate set of fairness constraints and concealing the grounding constraint. To be specific, we introduce a belief-guided strategic mechanism, wherein agents iteratively interact with the decision system and maintain a belief distribution over the candidate set of fairness constraints. This belief-guided process enables agents, through iterative interaction and feedback, to update their belief distribution over the candidate set, thereby gradually aligning their belief with the grounding fairness constraint employed by the system. Extensive experiments on real-world and synthetic datasets demonstrate that PFA achieves lower group fairness gaps, higher acceptance of truly qualified individuals, and more stable outcomes compared to fully public or private fairness regimes.

Xinpeng Lv, Chunyuan Zheng, Yunxin Mao +8

National University of Defense Technology, Changsha, China · Peking University, Beijing, China · Shanghai University of Finance and Economics, Shanghai, China +2

Strategic Classification Mechanism Design Algorithmic Fairness Group Fairness Information Design

May 29, 2026physics.soc-ph

Civilizational Metamaterials: Engineering Coordination Under Capability Gradients and Structural Turbulence

We argue that governance must transition from a normative discipline to an engineering discipline, and we develop a formal framework, inspired by the physics of metamaterials, to make this transition quantitative and testable. Artificial General Intelligence affects civilization primarily by increasing decision velocity while human verification capacity remains bounded. When the cost of validating AI-generated outputs exceeds the expected utility of acting on them, rational agents default to inaction: a stable but catastrophic Nash equilibrium we term the Freezing Equilibrium. Drawing on metamaterials, where emergent macro-properties arise from designed microstructure, we develop a phenomenological constitutive law for institutional coordination:

R_{\mathrm{eff}} = β\cdot (1-ρ) \cdot (1-τ) \cdot (1-γρτ)

, where

β

is the decision branching factor,

ρ

is provenance fidelity,

τ

is the verification rate, and

γ\in [0,1]

captures correlated-detection synergy between provenance and verification failures. The model predicts a sharp phase transition between self-healing (

R_{\mathrm{eff}} < 1

) and self-destabilizing (

R_{\mathrm{eff}} > 1

) regimes. We introduce a three-class provenance taxonomy: cryptographic, institutional, and context binding, and derive four falsifiable hypotheses with a proposed 12-week stepped-wedge cluster-randomized trial in government grant review panels. The framework bridges AI alignment theory and institutional design.

David Orban

Independent Researcher

Multi-Agent Coordination Mechanism Design AI Alignment AI Governance

May 29, 2026cs.GT

Social welfare optimisation under institutional reward and punishment

Institutional incentives are widely used to promote cooperation among autonomous, self-regarding agents, from human societies to multi-agent and AI systems. Existing work typically treats incentive design as a bi-objective problem: minimise institutional cost while achieving a high long-run frequency of cooperation. Whether such schemes also maximise social welfare - total population payoff net of institutional expenditure - has remained largely unexplored. We develop a welfare-centric framework for institutional incentives in finite, well-mixed populations playing a social dilemma (Donation Game and Public Goods Game), considering both rewards for cooperators and punishments for defectors. For each mechanism, we derive explicit expressions for expected social welfare and characterise how it depends on incentive efficiency and selection intensity. Analytically, we identify parameter regimes where social welfare has a single optimal incentive level and regimes with qualitative phase transitions, in which welfare becomes non-monotonic with multiple local optima. We prove that any welfare-maximising incentive is either zero or concentrated around a simple closed-form target, and we provide an efficient algorithm to compute these optima. Comparing reward and punishment, we further derive close-formed conditions under which reward outperform punishment in terms of social welfare for any given budget. Overall, our results reveal a systematic gap between incentives optimised for cost or cooperation frequency and those that maximise welfare.

Van An Nguyen, Vuong Khang Huynh, Huu Loi Bui +8

Faculty of Computer Science and Engineering, Ho Chi Minh City University of Technology (HCMUT), Vietnam · 2Vietnam National University - Ho Chi Minh City (VNU-HCM), Vietnam · School of Computing, Engineering and Digital Technologies, Teesside University,2026 United Kingdom +1

Social Dilemmas Mechanism Design Evolutionary Game Theory

May 29, 2026econ.TH

Comparing Market Mechanism Efficiencies

We develop a game-theoretic framework that compares welfare efficiency across three market mechanisms: continuous double auctions with transparent order books (lit exchanges), opaque order books (dark pools), and periodic batch auctions. Each mechanism is modeled as a queuing system where heterogeneous traders face trade-offs between the execution price, waiting costs, and transaction costs. Our main result establishes that under moderate arrival rates and bounded adverse selection, dark pools dominate both alternatives in aggregate ex-ante welfare. Observable order books create costly strategic timing games in which traders delay or rush submissions to optimize their position in the queue, generating wasteful social waiting costs. Opaque order books eliminate these timing games through information design. We formally characterize the equilibrium strategies in each mechanism and prove the welfare ranking

W^{DARK} > W^{LIT} > W^{BATCH}

. Extensions incorporate asymmetric information and endogenous venue choice. The results demonstrate how the information structure and the discipline of the service jointly determine efficiency in strategic matching environments.

Irene Aldridge

Mechanism Design Quantitative Finance Information Design

May 29, 2026cs.AI

Healthcare Mechanisms from Policy-as-Code Search under Strategic Provider Response

Healthcare mechanisms are inseparable from the strategic provider response they induce: existing healthcare AI benchmarks hold this response fixed and so cannot evaluate mechanisms by the equilibrium they produce. We recast hospital mechanism design as program synthesis for language models: typed, inspectable rule programs are executed and scored by Medi-Sim, a multi-agent simulator with five strategic provider channels (coding, selection, delay, effort, triage). An incentive sweep recovers classical health-economics findings as adjacent regimes -- up-coding and low-complexity-patient selection under profit pressure, and Goodhart-style drift where measured performance becomes anti-correlated with true outcomes -- and a single audit lever exposes pressure migration: closing the coding channel more than doubles low-complexity selection. LLM-guided evolutionary code search over the same rule-program space then synthesizes an inspectable mixed-objective program that eliminates up-coding, halves rejection, and retains most of the profit-oriented baseline's funds.

Zihan Wang, Xiang Xu, Hongyuan Zha +1

The Chinese University of Hong Kong, Shenzhen · Tongji University

Mechanism Design LLM-Based Program Synthesis

May 27, 2026cs.AI

SwarmHarness: Skill-Based Task Routing via Decentralized Incentive-Aligned AI Agent Networks

Vast quantities of compute (GPU cycles on personal workstations, idle inference servers, and edge devices between jobs) go unused because no incentive-aligned protocol exists for their owners to share them safely and profitably. Existing approaches either require a trusted central coordinator (cloud marketplaces), demand heavy blockchain infrastructure (Golem, BrokerChain), or lack an incentive layer entirely (BOINC, Petals). We propose SwarmHarness, a decentralised protocol in which HarnessAPI skill nodes self-organise into a compute swarm without any central authority. SwarmHarness has three interlocking components: a SwarmRegistry built on a Distributed Hash Table (DHT) for peer discovery and capability advertisement; a SwarmRouter that dispatches tasks to nodes using a utility function over capability, load, latency, and trust; and SwarmCredit, an incentive mechanism that attributes compute-credit rewards to contributing nodes via a Shapley-value approximation. Nodes earn credits by serving tasks and spend credits to submit them; idle nodes that never contribute drain credits and lose routing priority, creating a self-regulating participation economy. As nodes specialise toward high-reward skills and routing signals act as digital pheromones, the network exhibits emergent collective intelligence analogous to biological swarms. Beyond compute sharing, SwarmHarness is a foundational primitive for autonomous distributed AI agent networks in which agents hire compute, route subtasks, and settle credits without human intermediation.

Edwin Jose

Department of Computer Science Western Michigan University Kalamazoo, MI 49008, USA

Mechanism Design Multi-Agent Orchestration

May 26, 2026cs.LG

Greening AI Inference with Accuracy and Latency-aware User Incentives

The widespread use of AI services has raised concerns for its environmental sustainability, towards which recent studies have identified carbon emissions of AI inference as the major contributor. This paper introduces a framework for designing AI inference incentives based on the users' valuation for inference quality and latency, together with their environmental consciousness, while accounting for the tradeoff between carbon emissions and the two QoE parameters. Our approach can accommodate different tradeoffs, that depend on the size and complexity of the AI models and the allocation of resources to serve inference requests. The incentives can be offered through a practical two-tier service subscription that offers users a discount in exchange for reduced carbon emissions. The discounted service option gives the AI provider the flexibility to serve some percentage of inference requests at a lower quality and higher latency during periods of high carbon intensity.

Vasilios A. Siris, Adamantia Stamou, George D. Stamoulis +2

Department of Informatics, School of Information Sciences and Technology, Athens University of Economics and Business, Greece · Huawei Heisenberg Research Center, Munich, Germany

Mechanism Design Energy-Efficient ML

May 26, 2026cs.RO

A Bioinspired Underwater Robot with a Latch-Mediated Soft Bistable Mechanism

Underwater robotics has advanced significantly over recent decades. however, the development of miniaturized underwater robots remains limited by low energy densities of traditional power sources. Nature offers compelling solutions-organisms like mantis shrimps and fleas utilize latch-mediated spring actuation (LaMSA) systems that achieve rapid movements through a decoupled energy storage and release mechanism. Despite extensive studies of LaMSA, replicating such rapid, asymmetric actuation within simple, compact structures remains challenging. In this work, we introduce a bioinspired, soft bistable actuator with an integrated latch mechanism that enables asymmetric energy input and release using a single motor. Coupled with fin structures, this design facilitates efficient underwater propulsion and maneuverability. Experimental results demonstrate stable periodic flapping, precise steering, and a maximum thrust of 0.528 N, impulse of 0.147 Ns, and vertical displacement of 30 mm. By modulating fin angles, the robot achieves versatile motions, including vertical ascent, diagonal forward movement, and lateral translation. This study presents a novel, energy-efficient approach for controlling motion in compact underwater robots, paving the way for advanced biomimetic designs with potential applications in exploration, environmental monitoring, and inspection.

Chongze Bi, Wenjie Wu, Zonghao Zuo +1

School of Mechanical Engineering and Automation, Beihang University

Mechanism Design Underwater Robotics Soft Robotics

May 25, 2026cs.MA

AgentSociety: Incentivizing Agentic Social Intelligence

The success of deployed agents relies on their ability to handle open-ended user requests using their inherent capabilities, not only in solving requests directly but also in effectively leveraging inter-agent communication channels and feedback signals over time. This requires a multi-agent environment where agents can operate autonomously, strategically communicate, behave collaboratively and be driven by economic incentives, much like humans in society. Towards this vision, we propose

\mathtt{AgentSociety}

, a mechanism that enables decentralized agentic collaboration grounded in liquid democracy and information diffusion from social choice theory. We show that

\mathtt{AgentSociety}

provides an environment for agents to make autonomous decisions utilizing their local context to maximize their utility while achieving collective outcomes through incentivized collaboration. Specifically, we prove that delegation to more competent neighbor agents is incentive compatible and naturally generates multi-agent routing path by consensus. Additionally, our mechanism incentivizes agents to selectively disclose information to their neighbor agents when doing so aligns with their self-interest, so as to garner influence. We characterize the Nash equilibrium showing that agent payoffs are reflective of their marginal contributions. We compare and benchmark strategy profiles adopted by open and proprietary state-of-the-art language models deployed in

\mathtt{AgentSociety}

against best response. Finally, we evaluate collaborative performance from consensus-based routing among self-interested heterogeneous agents in

\mathtt{AgentSociety}

on real-world datasets.

Aditya Vema Reddy Kesari, Krishna Reddy Kesari

IIT Bombay, India · Amazon, US

Mechanism Design Multi-Agent Collaboration Multi-Agent Communication

May 24, 2026stat.AP

Rejoinder: The ICML 2023 Ranking Experiment: Examining Author Self-Assessment in ML/AI Peer Review

This article is the rejoinder to ``The ICML 2023 Ranking Experiment: Examining Author Self-Assessment in ML/AI Peer Review,'' to appear in the Journal of the American Statistical Association with discussion. To address the practical and theoretical points raised by the discussants, we organize our response around four core themes: (i) formulating peer review as a statistical estimation problem; (ii) mitigating equity and strategic concerns in the deployment of the Isotonic Mechanism; (iii) incorporating complementary signals such as reviewer rankings and structured metadata; and (iv) exploring a human-centered framework for peer review in the era of generative AI.

Buxin Su, Jiayao Zhang, Natalie Collina +6

*University of Pennsylvania. · †University of Wisconsin–Madison. · ‡Associate Chair of ICML 2023. University of North Carolina at Chapel Hill. +2

Mechanism Design Scholarly Peer Review Human-AI Decision Making Automated Peer Review

May 22, 2026cs.LG

Truthful Online Preference Aggregation for LLM Fine-Tuning in Mobile Crowdsourcing

To better serve users' demands in mobile applications (e.g., navigation), mobile crowdsourcing platforms can iteratively align large language model (LLM)-generated content (e.g., AI-generated traffic condition predictions) with human feedback collected from crowdsourcing workers (e.g., mobile users). However, workers may strategically misreport their online preference feedback to maximize their influence or payment. Existing pipelines in mobile crowdsourcing (e.g., EM-based weight estimation) fail to identify the most accurate worker in this online setting, resulting in a linear regret

\mathcal{O}(T)

over

T

time slots. In this paper, we study truthful online preference aggregation for LLM fine-tuning in mobile crowdsourcing. We formulate a new dynamic Bayesian game to model the multi-agent online learning process between the platform and strategic mobile workers. We propose a novel online weighted aggregation mechanism that dynamically adjusts each worker's weight in the preference aggregation according to their feedback accuracy. We prove that our mechanism ensures truthful feedback from strategic workers and achieves a sublinear regret

\mathcal{O}(\sqrt{T})

over

T

time slots. We further extend our mechanism to a challenging scenario with limited worker feedback per time slot, still guaranteeing a sublinear regret

\mathcal{O}(\sqrt{T})

. Experiments on LLM fine-tuning with real-world datasets further demonstrate significant performance gains of our mechanisms over benchmark schemes.

Shugang Hao, Lingjie Duan

Singapore Wireless Innovation Centre, Singapore University of Technology and Design, Singapore, 487372 Singapore · Internet of Things Thrust and the Artificial Intelligence Thrust, Hong Kong University of Science and Technology, Guangzhou 511455, China

Mechanism Design LLM Fine-Tuning User Preference Modeling

May 19, 2026cs.GT

Multi-Dimensional Matching in Market Design

This paper proposes a computationally efficient mechanism for multi-dimensional matching markets where agents report preferences over object features rather than complete utility assessments. We use Singular Value Decomposition (SVD) to identify the principal direction of variation in feature space and match agents to objects along this dimension, reducing a complex multi-dimensional problem to an effectively one-dimensional problem solvable in

O(N \log N)

time. We show that when data exhibit low effective dimensionality, our mechanism approximately maximizes Nash Social Welfare, satisfies distributional truthfulness, and achieves symmetry. We establish a novel connection between Nash Social Welfare and Geometric Distributionally Robust Optimization, providing robustness guaranties. Numerical experiments demonstrate that our approach achieves 99% optimal welfare while running three orders of magnitude faster than direct optimization. The framework applies naturally to school choice, labor markets, and course allocation, where feature-based elicitation reduces the cognitive burden on agents.

Irene Aldridge

Irene Aldridge

Mechanism Design

May 17, 2026cs.MA

Reservation Based Smart Parking Management

In the framework of Smart Cities and Intelligent Transportation Systems (ITS), efficient parking management is essential to reduce urban congestion and emissions. However, current reservation-based systems often encounter a scenario in which users find their reserved slot occupied by a previous occupant who failed to vacate on time ("No PARK" situation). This paper introduces a dual-mechanism architecture designed to enhance system reliability. A Reservation Module uses a dynamic size buffer of non-reservable slots to grant parking availability. A reputation-based Reward System exploits a "star-based" metric to incentivize punctual departures through financial penalties and access restrictions. The simulations conducted with the SUMO urban simulator are promising, showing that the dynamic buffer strategy provides a better tradeoff between parking availability and reservation success. By progressively adapting to users behavior, the proposed system mitigates "NO PARK" instances and improves resource utilization, significantly enhancing urban viability. Index Terms-Smart City, Intelligent transportation systems, Parking, Reservation systems, V2I, Reputation-based mechanisms, Smart Parking

Giacomo Cabri, Manuela Montangero, Filippo Muzzini +1

dept. Physics, Informatics and Mathematics University of Modena and Reggio Emilia Modena, Italy

Mechanism Design Intelligent Transportation Systems

May 16, 2026cs.RO

SSTL: Self-Sensing Tendon Loop for Hysteresis Modeling and Compensation in Tendon-Sheath Mechanisms

Flexible endoscopic robots enable minimally invasive access through natural orifices, but their control accuracy is limited by configuration-dependent hysteresis in the tendon-sheath mechanisms (TSMs). Tendon-sheath friction and tendon elasticity induce a systematic discrepancy between the proximal actuation input and distal output, and this discrepancy varies with the insertion tube configuration. To address this challenge, this paper proposes the Self-Sensing Tendon Loop (SSTL), a double-pass tendon loop routed through the insertion tube and wrapped around a distal pulley, and returned to the proximal end. The loop structure allows both the input and output tensions of the SSTL to be measured proximally, thereby providing an input-output tension profile without requiring distal force or fiber-optic sensors. Because the SSTL shares the same routing path as the actuation TSM, the two TSMs exhibit strongly correlated hysteresis behaviors. From the SSTL tension profile, a learning-based mapping estimates the configuration-dependent hysteresis parameters of the actuation TSM, which are then used by a feedforward controller to compensate for actuation hysteresis. We validate the proposed method by tracking actuation tendon tension under three different insertion tube configurations. Across sinusoidal and random trajectories, the proposed method reduces average RMSE by 88.1% compared with the uncompensated baseline, achieving 97.8% of the performance of direct identification, which requires direct measurement of the input and output tension profile of the actuation TSM.

Myeongbo Park, Junhyun Park, Ihsan Ullah +2

Robotic Control Mechanism Design System Identification Tendon-Driven Actuation Surgical Robotics

May 15, 2026cs.IR

LERA: LLM-Enhanced RAG for Ad Auction in Generative Chatbots

The integration of advertising auction mechanisms into large language model (LLM)-based chatbots presents a significant opportunity for commercialization, yet poses unique challenges in balancing relevance, efficiency, and user experience. Recently, Feizi et al.~~\citep{feizi2023online} and Hajiaghayi et al.~~\citep{hajiaghayi2024ad} outlined a retrieve-then-generate paradigm that decouples retrieval and generation, offering lightweight ad insertion and payment determination. However, current retrieval relies solely on text embedding similarity, which may lead to commercial misinterpretation and issues such as repetitive insertions. In this paper, we propose LERA, a two-stage retrieve-then-generate auction framework tailored for LLM chatbots. In the first stage, embedding-based coarse filtering pre-selects a small set of candidate advertisers. In the second stage, the LLM itself is queried with a carefully designed prompt to produce logits over candidates, which serve as refined organic relevance scores. These scores are combined with bids, and a critical-value payment rule accounts for both the coarse-filtering and fine-ranking thresholds, ensuring truthfulness for utility-maximizing advertisers. The framework naturally extends to multiple ad insertions within dynamic dialogue flows and long responses. Experiments on a synthetic advertiser-query benchmark show that LERA substantially improves ad selection accuracy and insertion diversity while incurring only controllable latency overhead.

Haoran Sun, Xinrui Song, Xinyu Zhang +7

Peking University · Shandong University · Alibaba Group

Retrieval-Augmented Generation Mechanism Design Online Advertising LLM Reranking Conversational Agents

May 13, 2026cs.LG

Collaborating in Multi-Armed Bandits with Strategic Agents

We study collaborative learning in multi-agent Bayesian bandit problems, where strategic agents collectively solve the same bandit instance. While multiple agents can accelerate learning by sharing information, strategic agents might prefer to free-ride and avoid exploration. We consider a setting with persistent agents that participate in multiple time periods. This is in contrast to most previous works on incentives in multi-agent MAB, which assume short-lived agents, namely each agent has a single decision to make and optimizes their expected reward in that single decision. As in the multi-agent MAB model with incentives, our model does not have monetary transfers, and the only incentives are through information sharing. We propose \texttt{CAOS}, a mechanism that sustains collaboration as a Nash equilibrium while achieving strong regret guarantees. Our results demonstrate that collaborative exploration can be sustained purely through information sharing, achieving performance close to that of fully cooperative systems despite strategic behavior.

Idan Barnea, Ofir Schlisselberg, Yishay Mansour

Tel Aviv University · Google Research

Multi-Armed Bandits Mechanism Design Game Theory Multi-Agent Collaboration

May 12, 2026cs.GT

Profit Maximization in Bilateral Trade against a Smooth Adversary

Bilateral trade models the task of intermediating between two strategic agents, a seller and a buyer, who wish to trade a good. We study this problem from the perspective of a profit-maximizing broker within an online learning framework, where the agents' valuations are generated by a smooth adversary. We devise a learning algorithm that guarantees a

\tilde{O}(\sqrt{T})

regret bound, which is tight in the time horizon

T

up to poly-logarithmic factors. This matches the minimax rate for the stochastic i.i.d. case, and is also well separated from the adversarial setting, where sublinear-regret is unattainable. By extending the strong regret guarantees from the i.i.d. case to the smooth adversary, we significantly broaden the scope of settings where such fast rate is achievable, while closing an important gap in the regret landscape of this fundamental economic problem. To overcome the challenges posed by this adversary, we leverage a continuity property of smooth instances and combines this with a hierarchical net-construction of the broker's action space, which is analyzed via algorithmic chaining. We showcase the applicability of these techniques by deriving a similarly tight

\tilde{O}(\sqrt{T})

regret bound for a related mechanism design model: the joint ads problem.

Simone Di Gregorio, Paul Dütting, Federico Fusco +1

Department of Computer, Control and Management Engineering Sapienza University of Rome · Google Research · Department of Computer Science Aarhus University

Mechanism Design Minimax Regret Regret Minimization