Computing in Mechanism Design∗

Computational issues in mechanism design are important, but have received insufficient research interest until recently. Limited computing hinders mechanism design in several ways, and presents deep strategic interactions between computing and incentives. On the bright side, the vast increase in computing power has enabled better mechanisms. Perhaps most interestingly, limited computing of the agents can be used as a tool to implement mechanisms that would not be implementable among computationally unlimited agents. This chapter briefly reviews some of the key ideas, with the goal of alerting the reader to the importance of these issues and hopefully spurring future research. I will discuss computing by the center, such as an auction server or vote aggregator, in Section 2. Then, in Section 3, I will address the agents’ computing, be they human or software.