Strategy-Proof Mechanisms for Facility Location Games with Information Diffusion

Abstract

Diffusion mechanism design is a new research paradigm in the literature of mechanism design, which aims to incentivise agents to invite as many colleagues as possible to participate in a mechanism. In this paper we apply diffusion mechanism design to the facility location game, one of the most well-studied model in MAS domain. We first provide a general impossibility result on the existence of possibly randomized facility location mechanisms that are strategy-proof, Pareto efficient and fully anonymous. We then present two strategy-proof mechanisms that satisfy some weaker notions of anonymity.