From monetary to nonmonetary mechanism design via artificial currencies

Artur Gorokh, Siddhartha Banerjee, Krishnamurthy Iyer

Research output: Contribution to journalArticlepeer-review


Nonmonetary mechanisms for repeated allocation and decision making are gaining widespread use in many real-world settings. Our aim in this work is to study the performance and incentive properties of simple mechanisms based on artificial currencies in such settings. To this end, we make the following contributions: For a general allocation setting, we provide two black-box approaches to convert any one-shot monetary mechanism to a dynamic nonmonetary mechanism using an artificial currency that simultaneously guarantees vanishing gains from nontruthful reporting over time and vanishing losses in performance. The two mechanisms trade off between their applicability and their computational and informational requirements. Furthermore, for settings with two agents, we show that a particular artificial currency mechanism also results in a vanishing price of anarchy.

Original languageEnglish (US)
Pages (from-to)835-855
Number of pages21
JournalMathematics of Operations Research
Issue number3
StatePublished - Aug 2021

Bibliographical note

Funding Information:
Funding: This work was supported by the National Science Foundation Division of Electrical, Com-munications and Cyber Systems [Grant ECCS-1847393], Division of Mathematical Sciences [Grant DMS-1839346], and Division of Civil, Mechanical and Manufacturing Innovation [Grants CMMI-1462592 and CMMI-1633920], and the Army Research Laboratory [Grant W911NF-17-1-0094].

Publisher Copyright:
© 2021 INFORMS


  • Artificial currencies
  • Budget constraints
  • Dynamic mechanism design


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