Fault Tolerance in Distributed Mechanism Design

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Abstract

We argue that in distributed mechanism design frameworks it is important to consider not only rational manipulation by players, but also malicious, faulty behavior. To this end, we show that in some instances it is possible to take a centralized mechanism and implement it in a distributed setting in a fault tolerant manner. More specifically, we examine two distinct models of distributed mechanism design – a Nash implementation with the planner as a node on the network, and an ex post Nash implementation with the planner only acting as a “bank”. For each model we show that the implementation can be made resilient to faults.