Performative Prediction on Games and Mechanism Design

• URL: http://arxiv.org/abs/2408.05146v2
• Date: Fri, 1 Nov 2024 23:40:14 GMT
• Title: Performative Prediction on Games and Mechanism Design
• Authors: António Góis, Mehrnaz Mofakhami, Fernando P. Santos, Gauthier Gidel, Simon Lacoste-Julien,
• Abstract summary: We study a collective risk dilemma where agents decide whether to trust predictions based on past accuracy. As predictions shape collective outcomes, social welfare arises naturally as a metric of concern. We show how to achieve better trade-offs and use them for mechanism design.
• Score: 69.7933059664256
• License: http://creativecommons.org/licenses/by/4.0/
• Abstract: Agents often have individual goals which depend on a group's actions. If agents trust a forecast of collective action and adapt strategically, such prediction can influence outcomes non-trivially, resulting in a form of performative prediction. This effect is ubiquitous in scenarios ranging from pandemic predictions to election polls, but existing work has ignored interdependencies among predicted agents. As a first step in this direction, we study a collective risk dilemma where agents dynamically decide whether to trust predictions based on past accuracy. As predictions shape collective outcomes, social welfare arises naturally as a metric of concern. We explore the resulting interplay between accuracy and welfare, and demonstrate that searching for stable accurate predictions can minimize social welfare with high probability in our setting. By assuming knowledge of a Bayesian agent behavior model, we then show how to achieve better trade-offs and use them for mechanism design.

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