Modelling and Control with Karma Economies

This tutorial-style talk introduces dynamic incentive design for socio-technical resource allocation problems that arise in transportation, energy, communication, and many other critical applications. The focus is on theoretical tools for modelling and control using karma economies, a novel dynamic incentive scheme that achieves fair and efficient socio-technical resource allocations without relying on financial instruments. The tutorial covers the following topics: a) Fundamental limitations of static incentive design in jointly achieving fairness and efficiency, and how dynamics enable overcoming these limitations; b) basic constituents of a dynamic socio-technical resource allocation problem and its connection to mean-field games; c) introduction to mean-field games and their reduction to (static) population games; d) computation of mean-field equilibria using evolutionary dynamics; e) modelling of karma economies as a mean-field game: existence of karma mean-field equilibria, and mean-field game models for first price vs. second price karma auctions; and f) analysis of karma mean-field equilibria and the resulting resource allocation fairness and efficiency. Interactive teaching elements will be used, including a coding exercise and an online experiment.