Abstract
In many markets, it can be beneficial for competing firms to coordinate their actions. The average payoffs for everyone in the group can be improved by everyone agreeing on a deal to collude. However, such arrangements usually have the problem that nobody has an incentive to adhere to the agreement. In this paper we investigate a way for two companies to communicate together and agree on a coordinated strategy in such a way that both participants have an incentive to keep to the agreement.
We provide a more efficient solution to the game theoretic problem solved by Dodis, Halevi and Rabin in [DHR00]: two selfish rational parties want to select one of a list of pairs, according to some probability distribution, so that one party learns the first element and the other learns the second, and neither gains any other information. In game theory terms, the problem is to achieve a correlated equilibrium without the trusted mediator. Our solution is more efficient than [DHR00] in terms of the probability distribution.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Archer, A., Tardos, E.: Truthful mechanisms for one-parameter agents. In: Proceedings of the 42nd IEEE Symposium on Foundations of Computer Science, pp. 482–491 (2001)
Barany, I.: Fair distribution protocols or how the players replace fortune. Mathematics of Operations Research 17(2), 327–340 (1992)
Dodis, Y., Halevi, S., Rabin, T.: A cryptographic solution to a game theoretic problem. In: Bellare, M. (ed.) CRYPTO 2000. LNCS, vol. 1880, p. 112. Springer, Heidelberg (2000)
Feigenbaum, J., Papadimitriou, C., Shenker, S.: Sharing the cost of multicast transmissions. Journal of Computer and System Sciences 63, 21–41 (2001); Special issue on Internet Algorithms
Feigenbaum, J., Papadimitriou, C., Sami, R., Shenker, S.: A bgp-based mechanism for lowest-cost routing. In: Proceedings of the 21st Symposium on Principles of Distributed Computing, New York, pp. 173–182. ACM Press, New York (2002)
Fudenberg, D., Tirole, J.: Game Theory. MIT Press, Cambridge (1991)
Goldreich, O.: Draft of a chapter on general protocols: Extracts from a working draft for volume 2 of foundations of cryptography (2003), Available at http://www.wisdom.weizmann.ac.il/~oded/
Goldwasser, S., Micali, S.: Probabilistic encryption. Special issue of Journal of Computer and Systems Sciences 28(2), 270–299 (1984)
Naor, M., Pinkas, B., Sumner, R.: Privacy preserving auctions and mechanism design. In: Proceedings of the 1st ACM conf. on Electronic Commerce (1999)
Nisan, N., Ronen, A.: Algorithmic mechanism design. Games and Economic Behavior 35, 166–196 (2001)
Osborne, M., Rubinstein, A.: A course in Game Theory. MIT Press, Cambridge (1994)
Roughgarden, T., Tardos, E.: How bad is selfish routing? Journal of the ACM 49(2), 236–259 (2002)
Urbano, A., Vila, J.: Computational complexity and communication: coordination in two-player games. Econometrica 70(5), 1893–1927 (2002)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2004 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Teague, V. (2004). Selecting Correlated Random Actions. In: Juels, A. (eds) Financial Cryptography. FC 2004. Lecture Notes in Computer Science, vol 3110. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-27809-2_20
Download citation
DOI: https://doi.org/10.1007/978-3-540-27809-2_20
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-22420-4
Online ISBN: 978-3-540-27809-2
eBook Packages: Springer Book Archive