Robustness and Optimization of Scrip Systems

Google Tech Talk November 29, 2012 (more info below) Presented by Joseph Halpern. ABSTRACT Scrip systems, where users pay for service with an artificial currency (scrip) created for the system, are an attractive solution to a variety of problems faced by P2P and distributed systems. Despite the interest in building scrip systems, relatively little work has been done to help answer basic design questions. For example, how much money should there be in the system? What will happen if some of the users start hoarding money? I present a game-theoretic model of a scrip system and show that this model has Nash equilibria where all agents use simple strategies known as threshold strategies. In fact, the same techniques provide an efficient method of computing these equilibria as well as the equilibrium distribution of wealth. I show how these results provide practical insights into the design of scrip systems. For example, social welfare is maximized by increasing the money supply up to the point that the system experiences a "monetary crash," where money is sufficiently devalued that no agent is willing to perform a service. Hoarders generally decrease social welfare but, surprisingly, they also promote system stability by helping prevent monetary crashes. Furthermore, the effects of hoarders can be mitigated simply by printing more money. This represents joint work with Ian Kash and Eric Friedman. About the speaker: Joseph Halpern received a B.Sc. in mathematics from the University of Toronto in 1975 and a Ph.D. in mathematics from Harvard in 1981. In between, he spent two years as the head of the Mathematics Department at Bawku Secondary School, in Ghana. After a year as a visiting scientist at MIT, he joined the IBM Almaden Research Center in 1982, where he remained until 1996, also serving as a consulting professor at Stanford. In 1996, he joined the CS Department at Cornell, and is now department chair. Halpern's major research interests are in reasoning about knowledge and uncertainty, security, distributed computation, decision theory, and game theory. Together with his former student, Yoram Moses, he pioneered the approach of applying reasoning about knowledge to analyzing distributed protocols and multi-agent systems. He has coauthored 6 patents, two books ("Reasoning About Knowledge" and "Reasoning about Uncertainty"), and over 300 technical publications. Halpern is a Fellow of AAAI, AAAS, ACM, and IEEE. Among other awards, he received the ACM SIGART Autonomous Agents Research Award in 2011, the Dijkstra Prize in 2009, the ACM/AAAI Newell Award in 2008, the Godel Prize in 1997, was a Guggenheim Fellow in 2001-02, and a Fulbright Fellow in 2001-02 and 2009-10. Two of his papers have won best-paper prizes at IJCAI (1985 and 1991), and another two received best-paper awards at the Knowledge Representation and Reasoning Conference (2006 and 2012). He was editor-in-chief of the Journal of the ACM (1997-2003) and has been program chair of a number of conferences, including the Symposium on Theory in Computing (STOC), Logic in Computer Science (LICS), Uncertainty in AI (UAI), Principles of Distributed Computing (PODC), and Theoretical Aspects of Rationality and Knowledge (TARK).