Transaction Fee Mechanisms (TFMs) are explored in-depth regarding their incentive-compatibility notions, including impossibility results for deterministic and randomized mechanisms that cannot simultaneously satisfy UIC, MIC, and OCA-proofness. The analysis reveals a balance between the requirements of collusion-resilience and truthfulness. Notably, allowing multiple bids instead of restricting to single bids offers potential feasibility for satisfying these complex conditions, advancing the understanding of optimal bidding strategies. A critical comparison of different collusion-resilience notions is made to illustrate the intricate relationships between them.
The impossibility results indicate that there is no non-trivial Transaction Fee Mechanism (TFM) that can satisfy UIC, MIC, and OCA-proofness simultaneously if restricted to single bidding.
The introduction of multiple bids enhances feasibility in mechanisms, suggesting that allowing for this flexibility can potentially alleviate the constraints of truthfulness and incentive compatibility.
#transaction-fee-mechanism #incentive-compatibility #collusion-resilience #bidding-strategy #mechanism-design
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