Mechanism Design for Environmental Issues. Shinji Tomita* Non-member. Akira Namatame* Member. In this paper, we consider the problem of the mechanism ...
Mechanism Design for Environmental Issues Shinji Tomita* Non-member Akira Namatame* Member In this paper, we consider the problem of the mechanism design for the multi-agents system. We develop the social learning model for the mechanism design for creating the collective action with an efficient cost sharing rule. We consider the situation in which self-interest agents have incentives to cooperate each other for jointly acquiring the environmental level with sharing the necessary cost. We obtain the optimal level of the environment to be acquired and the cost allocation rule so that their individual rationality is satisfied, and at the same time the social rationality is also satisfied. We show that the factors such as the value (worth) of the environmental level perceived by each agent and the cost affect the level the collective action. A social rule of allocating the common cost among agents is developed with decentralized transaction mechanism. We formulate and analyze the problem of cooperating multiple agents under uncertainty. We show that when agents cooperate in order to encounter uncertainty when acting alone, their benefits would not be as attractive, and hence cooperate to share the risk. As a specific example, we consider the model of obtaining the environmental level by sharing cost. We propose the negotiation mechanism for sharing cost among agents. With that mechanism, they can learn and obtain the unbiased and fare cost distribution rule.
Key words: environmental issues, incentive problem, social learning, decentralized transaction, cooperative protocol
1. Introduction Like a human individual or an organization, an agent is a
cost is promoted here by firstly satisfying each agent’s individual
theoretical concept constructed to exhibit the property of an
rationality with the appropriate distribution of the cost that could
autonomous entity, which seeks to achieve a self-interest goal.
not be accepted by each single agent incurred. Agents may benefit
They may form an organization because of the joint interest for
from the collective action of sharing the cost.
efficient resource acquisition or allocation. They may form an organization for sharing the necessary cost of the common infrastructure
(2)(3)(4)(6)
.
We
formulate
the
optimal
problem of
acquiring
the
environmental level with sharing the cost. The very basic question is then stated what level of the environment or infrastructure
In this paper, we consider the collective action problem of
should be acquired as the collective action and how agents
multi-agents. When acting alone without cooperation, their
negotiate to share the common cost. We show that the factors such
standalone behavior would not be as attractive, and hence the
as the worth and the sharing cost of the environmental level
collective action can be attractive. Collective action for sharing
perceived by each agent may affect the formation of the collective
* Dept. of Computer Science National Defense Academy Yokosuka,
action. We obtain the mechanism of an efficient and unbiased
239-8686, JAPAN
sharing rule of the common cost. We show such a social rule varies
with the changing incentive of each agent. Therefore in order to
alone. The agents benefit from the cooperative behaviors of
form the optimal collective action, it may require that their interest
sharing the cost or a load where they cannot fulfill alone (5)(7).
or incentive is not jeopardized, and the conditions of both the
In this paper, we consider the cooperating problem of multiple
individual rationality and the social rationality should be satisfied.
agents under uncertain situations. As a specific example, we
However, conflicts may occur when agents behave in such that the
consider the problem of cooperating agents in the environmental
cost accordingly to the declared value of each agent.
maintenance model. The price is not set on the loss by
We can also consider a society of agents each of them behaves
environmental pollution and when the polluter produces and
with the common goal. The key element that distinguishes such a
consumes without considering the loss, environmental pollution as
common goal from an agent’s individual goal is that it requires a
the external diseconomy is generated. For many sorts of pollution,
collective action. These collective action problems also pose
particularly that of the atmosphere or sea, it is fairly accurate to say
difficult quandaries for a society. However, each member of the
that a polluter cannot choose to pollute one group of agents rather
society who wants to attain a common goal, may be tempted to
than another, that is, pollution can be said as a pure public bad and
benefit from goal without contributing to the common goal. There
hence pollution reduction as a public good (8). In this situation, two
is a long history of interest in such social dilemmas, known as free
or more agents cooperate to share the cost of obtaining certain
riding problems of this type in many fields
(3)
. It may require same
environmental level from environmental maintenance activity. The
enforcement in the form of social rule in order to achieve a
agents benefit from the cooperative behavior in maximizing their
common goal
(1)
. The problem of incentive compatible may occur
when these agents behave in such that the cost accordingly to each value possessed.
utility. When acting alone by themselves, their benefits would not be as attractive, and hence they cooperate by sharing the cost. We say, there is uncertainty involved here and agents may
In these cases, an efficient and unbiased social rule is thus
acquire certain environmental level together to share their risk or to
required to evaluate the best sharing rule among the agents to even
lower their possible cost. Cooperative behavior under uncertain
out the conflicts. We will discuss the collective action problem
circumstances can be made possible by considering their utilities
with basing the mechanism design. With this mechanism, the
while acquiring certain environmental level. Cooperative behaviors
optimal level of the environment can be acquired. The mechanism
under uncertainty is promoted here by, firstly satisfying each
also provides an efficient and unbiased social rule for sharing the
agent’s individual rationality by appropriately distributing the
common cost necessary for acquiring the environmental level at
worth and cost that could not be accepted by both or single agent
the optimal level. We design the model of social learning in which
incurred from acquiring the environmental level be accepted by all;
an efficient and unbiased cost sharing as a social rule is obtained
and also by satisfying the agents’ social rationality. The following
through the decentralized adjustment process.
factors like the value of environmental level possessed by each
2.
Environmental issues of the collective actions
agent, the utility through acquiring environmental level should be considered throughout the negotiation. Similarly, conflicts occur
When agents deal with one another, they often bring to the
when agents behave in such that the cost accordingly to each value
encounter differing goals, and the interaction process takes conflict
possessed. In this case, an efficient and unbiased sharing rule of the
into account. Each agent pursues its own goals through
common cost among the agents that evens out the conflicts should
encountering with other agents; arrangements should be made so
be designed.
that each individual's goal can be satisfied. Agents also may promise, threaten, and find compromises together that will satisfy all agents. The very basic question is then stated as why and how do agents should cooperate than to act independently. There can be many answers to this multi-edged question, but generally, it can be deduced that agents cooperate in order to share the common benefit or the certain load which each individual cannot fulfill
Fig.1 illustrates the concept of the collective action to maintain an environment or the common infrastructure for multi-agents.
Each agent’s utility is denoted as, ui (Ωi − ci , Y ) , where
Ωi , i = 1,2,...,n
Maintain of Environmental level
represents
the
initial
private
resource,
ci , i = 1,2,..., n represents the cost shared for environmental maintenance, and Y represents the environmental level. The
Cost sharing
Benefit from a
condition of the individual rationality is then given as :
good environment
ui (Ωi − ci , Y ) ≥ ui (Ωi ,0)
(3.1)
As a special example, we consider the following semi-linear utility function of each agent.
ui (Ω i − ci , Y ) = Ω i − ci + 2α i Y
(3.2)
Fig.1 The collective action problem of obtaining the
where α i represents the benefit coefficient received from the
environmental level
environment. This is private information. If one agent has big value of α i , he can receive big benefit from environment.
The very basic question is stated as why and to whom do agents
Contrary, if another agent has small value of α i , he receives small
cooperate than to act independently. How agents with the different
benefit from environment. Then the condition of the individual
worth of the environmental level attempt to share the common
rationality is given as
cost? The following factors like the value of the environmental
ui (Ω i − ci , Y ) − ui (Ω i 0) = 2α i Y − ci ≥ 0 (3.3)
level possessed by each agent, the utility through acquiring the environmental level should be considered. Each agent attains a
Therefore, each agent agrees to share the environmental level if the
certain worth from the environmental level, however, they are
following condition is satisfied.
required to pay or share for every cost associated with the
Y ≥ ci / 2α i
(3.4)
environmental maintenance activity. In this instance, each agent considers about his worth and cost of the environmental level, and finds out that by cooperating with other agents to share the cost so
Condition 2: Social Rationality
that his utility will be improved. In this case, the agent is said to be
The condition of the social rationality requires that when an
benefiting from the collective action with sharing the common
agreement is reached, no agent’s utility will decline, and no one
cost.
will be improved by any means. We specify the optimal solution that maximizes the summation of each individual utility in (3.3) as
3. The optimal social rule and free riding problem In this section, we obtain the optimal level of the environmental level to be acquired by a society and investigate the properties of
a solution satisfying the social rationality. n
n
i =1
i =1
∑ ui ( xi , Y ) ≥ ∑ ui (Ωi ,0)
(3.5)
the collective action. Each agent assesses all the results of his behaviors, and this assessment is measured in terms of his utility.
where xi = Ωi − ci represents the private resource. We can obtain
To participate in the collective action through negotiation, each
the solution satisfying the condition of the social rationality by
agent first examines if his utility is improved by obtaining such the
solving the following optimal problem:
environmental level. In other words, individual rationality must first be satisfied. At the same time social rationality must be
n
Max ∑ ui ( xi , Y ) Y
i =1
satisfied. This condition requires that when an agreement is reached, neither of the agent’s utility will be increased without declining the other agents’ utilities.
Condition 1: Individual Rationality
n
s. t. F( X, Y ) = 0,
∑x = X i
(3.6)
i=1
where
F( X, Y )
represents the kind of the production function of
the environmental level Y in terms of the private resource n
∑ x = X . The optimal solution of (3.6) is given by solving the i
i =1
n
i =1
i
∑
ui ( xi0 ,0) =
i=1
/ ∂ Y ) /( ∂ u i / ∂ x i ) = FY / F X
(3.7)
ui ( xi , Y ) = xi + ν i (Y )
n
n
i=1
i=1
n
n
n
i =1
i =1
i =1
= ∑xi + ∑ν i (Y*)−∑Ωi
(3.8)
n
= ∑ν i (Y *) − g (Y *) > 0
We also define the exchange function of the environmental level to private resource by
(3.16)
i =1
The agents should participate in the collective action and jointly
n
∑Ω −∑ x i
i=1
(3.15)
i
i=1
function of each agent i, i = 1,2,..., n
g(Y ) ≡
∑Ω
∑ui (xi ,Y*) − ∑ui (xi0 ,0)
As a special case, we consider the following quasi-linear utility
n
n
Therefore if the following condition is satisfied
following function,
∑ (∂u
n
acquires the environmental level. The effectiveness of such a
(3.9)
i
i=1
collective action is given as
The production function of the environmental level in terms of the private resource appeared as the constraint in (3.8) is defined using
h(Y*) =
n
∑ν (Y*) − g(Y*)
(3.17)
i
i=1
the exchange function g(Y )
As a special example, we consider the following case where
n
F ( X , Y ) = X + g(Y ) − ∑Ωi
ui ( xi , Y ) = xi + 2α i Y,
i =1
n
n
i =1
i =1
= ∑ xi + g (Y ) − ∑ Ω i = 0
g (Y ) = kY (3.10)
n
F ( X , Y ) = X + kY − ∑ Ωi
Therefore the substitute rate of the environmental level to the private resource is given as
The optimal level of the environmental level
FY / FX = g' (Y )
Similarly, the substitute rate of the environmental level Y to the private resource of agent i is given as follows:
Y*
to be acquired
n
h' (Y *) = ∑ν i ' (Y *) − k i =1
(3.12)
Therefore, the optimal level of the environmental level
Y*
is given as the solution of
(3.11)
(∂ui / ∂Y ) / (∂ui / ∂xi ) = ν i ' (Y )
(3.18)
i =1
to be
n
= ∑ α iY −1 / 2 − k = 0
acquired by the society is given as the solution that satisfies
(3.19)
i =1
n
∑ν ' (Y *) = g ' (Y *) i =1
(3.13)
i
Therefore the optimal level of the environmental level
Y*
given as
The sum of each agent’s utility after obtaining the environmental level at the optimal level n
Y*
n
is then given as n
∑u (x ,Y*) = ∑x + ∑ν (Y*) i
i
i=1
i
i=1
i
(3.14)
i=1
The sum of each agent’s utility before acquiring the environmental level is given as
⎛ n ⎞ Y * = ⎜ ∑α i / k ⎟ ⎝ i=1 ⎠
2
(3.20)
n
h(Y *) = ∑ν i (Y *) − g (Y *) i =1
n
= ∑ (α 2 ) / k i =1
(3.21)
is
n
∑ν '(Y*) = g' (Y*)
Condition 3: free riding problem
∑c i =1
i
n
i=1
Step3: The cost shared by each agent ci (Y*) , i = 1,2,..., n , is
environmental level Y* is given as n
(4.1)
i
The cost shared by each agent to obtain the optimal
determined as follows:
= kY * = ∑ (α i ) / k 2
(3.22)
i =1
Distribution rule of the cost is undecided. In this case, it seems that
n ⎛ ⎞ ci (Y * ) = ⎜ν i' (Y * ) / ∑ν i' (Y * )⎟C (Y * ) i =1 ⎝ ⎠
(4.2)
each agent bears the cost according to his benefit coefficient
As a member of the society, the agent autonomic behaves in such
received from the environment α i is the most unbiased rule.
as to improve his utility with the social competence to behave
Then the cost shared by each agent is given as
together with other agents. This is the basic foundation for the social learning.
n ⎛ ⎞ ci = ⎜ α i / ∑ α i ⎟kY * i =1 ⎝ ⎠
(3.23)
The mechanism design (1)Optimal environmental level Y*
However, because the cost depend on private information α i and no one can know it, the problem is caused that private information is not honestly declared. For instance, if agent i declares his private information as
α i (α i = α i − β )
where
β
represents
the
amount
∑ν ' (Y *) = g ' (Y *) i =1
i
(2)Cost allocation rule n ⎛ ⎞ ci (Y *) = ⎜ν i ' (Y *) / ∑ν i ' (Y *) ⎟C (Y *) ⎝
of
⎠
i =1
c1(Y) ν1(Y) c2(Y) ν2(Y)
manipulation, the cost shared by him is given as
⎛ n ⎞⎛ n ⎞ ci − ci = −kα i β /⎜ ∑ α i − β ⎟⎜ ∑ α i ⎟ < 0 ⎝ i=1 ⎠⎝ i=1 ⎠
n
(3.24)
He can decrease the cost with false. From this, someone comes to manipulate his private information. Clark-Groves mechanism is known well as a method of solving this problem. Though as for
Agent 1 x1 Y
Agent 2 x2 Y
xi : private resource
cn(Y) νn(Y) ・・・
Agent n xn Y
Y : environmental level
Fig. 2 The mechanism design for the common cost
this mechanism, the surplus is caused in formulation of the rule side. So the cost shared by each agent increases (9).
4.
An evolutional approach for designing cost
sharing rules
The problem of incentive is defined as the issue of declaring private information of each agent without false. Then the question is how to design the cooperation protocol that is compatible with incentives of each selfish agent. In this section, we develop the
We now discuss about how the process of mutual learning is
mutual adjustment process among agents that compatible with
carried out in order to satisfy the individual rationalities of all
each individual agent and it may reveal the true cognitive states.
agents. The problem of incentive is defined as the issue of
The preceding sections explained mainly about the rationality of
declaring private information of each agent without false. Then the
the agents in cooperating with each other, and the cost distribution
question is how to design the cooperation protocol compatible with
rules that governs the cooperative behaviors.
incentive of each self-interest agent. We propose such a mechanism shown in Fig. 2 as follows: Step1: Each individual agent i declares his utility for the environmental level ν i (Y ), i = 1,2,..., n .
4.1 Proposed Model 1 In this section, we will discuss about how negotiation is carried out to satisfy the rationalities of the agents during cooperative behaviors. In our proposed model, there exists a negotiation manager within the same community of the participating agents as illustrated in Fig. 3. We show that
Step2: The socially optimal level of the environmental level is determined by solving
Pareto-efficient can be achieved if there is no manipulator.
Coordination Declare each level of marginal utility
ν i ' (Y )
Y*
Maintain of environmental level
Y
Y
Fig. 4 Environmental level over time Fig. 3 The coordination of the cooperation protocol 1
Utility of each agent Optimal utility
Step1: Initially, every agent will receive environmental level Y Average utility
from the negotiation manager upon agreement to negotiate. Step2: Each agent calculates his marginal utility based on the benefit coefficient received from the environment α i
and
declares it. Step3: The negotiation manager proposes new environmental level Yt+1 based on the marginal utility declared by each agent according
Fig. 5 Utility over time
to the following rule. n
if
∑α Y i =1
−1 / 2
i t
∑α Y i =1
From Fig 4,5 it is understood that environmental level Y and average utility are settled to optimal environmental level Y* and
n
if
− k > 0 then Yt +1 := Yt + δ (δ > 0)
−1 / 2
i t
− k < 0 then Yt +1 := Yt − δ
(4.3)
optimal utility respectively. This result means that this model can achieve the Pareto-efficient, even if no one knows the optimal
where δ represents the adjustment speed and the cost shared by
environmental level Y*. However, this model has a potential
each agent is provided by the next expression.
problem that the free ride on the other’s loads is possible by the
n ⎛ ⎞ ci = ⎜ν i ' (Yt ) / ∑ν i ' (Yt ) ⎟k (Yt +1 ) i =1 ⎝ ⎠
manipulation of own benefit coefficient received from the (4.4)
environment α i . To show this potential problem, we put the manipulator in this
Step4: Each agent calculates his marginal utility to new
simulation. The manipulator decreases his cost given as (3.24). In
environmental level and declares it.
this simulation, we sat the amount of manipulation β = 4 . Fig. 6
Step5: Repeat Step1 to Step4.
represents the environmental level over time and Fig. 7 represents
The point of this negotiation mechanism is that the cost shared
the average utility, when there are 80% manipulators.
by each agent is decided according to his marginal utility. A simulation applying the above suggested protocol was
Y*
performed to examine the behaviors of the agents during the negotiation process. In this simulation, when we sat the parameters
Y
of population n = 9, initial private resource Ωi = 1000, benefit coefficient
received
from
the
environment
α i = 6 ~ 14
(rectangular distribution) and k = 1 . We examine the validity of the model based on these optimal values. Fig. 4 represents the environmental level over time and Fig. 5 represents the utility over time.
Fig.6 Environmental level over time (The ratio of manipulator: 80%)
Utility of each agent Optimal utility
the environmental level α i in ε . ε represents the amount of improvement. If negotiation manager does not maintain environmental level, that manipulation is meaningless. Because manipulator can not
Average utility
obtain the benefit from an environmental level, his utility is lower than initial private resource. We show the result of the simulation when we sat the parameter of the proposed environmental level of third party =6000, the Fig. 7 Utility over time (The ratio of manipulator:
amount of manipulation β = 4 , rate of manipulator is 80% and
80%)
the amount of improvement ε = 0.05 . Fig. 9 represents the environmental level over time and Fig. 10 represents the average
From Fig.6,7 we can see that environmental level Y and average
utility, when there are 80% manipulators.
utility are not settle to optimal environmental level Y* and optimal Y*
utility respectively. When a lot of people try to get a free ride, it
Proposed level of third party
becomes a society that most people lose.
4.2 Proposed Model 2 The point of problem is that we
Accumulation in negotiation manager
can not know each agent’s private information. We can not find the Y
manipulator and give them penalty individually. Then, we added the third party to model 1 as illustrated in Fig. 8.
Negotiation manager
Propose the environmental level
Declare each level of marginal utility
Fig. 9 Environmental level over time (The ratio of manipulator: 80%)
ν i ' (Y )
Utility of each agent Optimal utility
Maintain of environmental level
Third party Average utility
Fig. 10 Utility over time (The ratio of manipulator: Fig. 8 The coordination of the cooperation protocol 2
We bring in the mechanism of all-or-nothing. The mechanism is
80%)
From Fig.9,10 we can see that environmental level Y and
that we added two steps after Step2 of Model 1.
average utility are settled to optimal environmental level Y* and
Step2.1: if the amount of cost shared is lower than the proposed
optimal utility respectively. However the social meaning of the
environmental level of third party, negotiation manager does not
accumulated cost to becomes a problem. This should be small.
maintain the environmental level. The amount of cost is
Next, we examined how an increase of the population and
accumulated in negotiation manager while the environmental level
difference of the proposed environmental level by third party
is not maintained.
influences on the simulation. We set the parameter of population
Step2.2: if the utility of manipulator in certain time is lower than
n = 100 and compare the proposed level 60000 and 600000. Fig
previous time, he improves his benefit coefficient received from
11,12 and Fig 13,14 are the results when the proposed level is
60000 and 600000 respectively. Y*
Y* Proposed level of third party
Y Accumulation in negotiation manager Proposed level of third party
Y
Fig. 11 Environmental level over time (The ratio of
Fig. 13 Environmental level over time (The ratio of
manipulator: 80%)
manipulator: 80%) Utility of each agent
Utility of each agent Optimal utility
Optimal utility
Average utility
Average utility
Fig. 12 Utility over time (The ratio of manipulator:
Fig. 14 Utility over time (The ratio of manipulator:
80%)
80%) perform the role of third party. However the problem still remains
The first understanding from these results, optimal levels have
which way we should adopt the proposal, high level or low level. It
risen compared with the case of small population. This is a natural
is a trade-off relation. It also can be said that this is a social
result. The point that should be paid attention, the big difference is
dilemma.
caused by the difference of the proposed environmental level of
References
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