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Published in: Dynamic Games and Applications 4/2019

19-09-2018

An Efficient Dynamic Allocation Mechanism for Security in Networks of Interdependent Strategic Agents

Authors: Farzaneh Farhadi, Hamidreza Tavafoghi, Demosthenis Teneketzis, S. Jamaloddin Golestani

Published in: Dynamic Games and Applications | Issue 4/2019

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Abstract

Motivated by security issues in networks, we study the problem of incentive mechanism design for dynamic resource allocation in a multi-agent networked system. Each strategic agent has a private security state which can be safe or unsafe and is only known to him. At every time, each agent faces security threats from outside as well as from his unsafe neighbors. Therefore, the agents’ states are correlated and have interdependent stochastic dynamics. Agents have interdependent valuations, as each agent’s instantaneous utility depends on his own security state as well as his neighbors’ security states. There is a network manager that can allocate a security resource to one agent at each time so as to protect the network against attacks and maximize the overall social welfare. We propose a dynamic incentive mechanism that implements the efficient allocation and is ex-ante (in expectation) individually rational and budget balanced. We present a reputation-based payment that mitigates any risk that the agents or the network manager may face to get a negative utility or to run a budget deficit, respectively, for some realizations of the network stochastic evolution. Therefore, our results provide a dynamic incentive mechanism that implements efficient allocations in networked systems with strategic agents that have correlated types and interdependent valuations, and is approximate ex-post individually rational and budget balanced.

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Appendix
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Footnotes
1
We note that in implementation theory approach, the assumptions on information structure of the problem are different from a Bayesian framework we follow in this work. Therefore, the impossibility result [9, 35] in static settings we discuss before does not hold.
 
2
For simplicity, we assumed that the probability \(d_i\) does not depend on the system’s state; our results hold when \(d_i\) is state-dependent.
 
3
Notice that from the technical point of view, the weights in this weighted average do not need to be necessarily the same as \(l_{ji}\). We can define the security index of agent i’s neighborhood based on any arbitrary set of weights and all the results continue to hold. However, the dependencies \(l_{ji}\)s are the most natural choice according to the model.
 
4
In Sect. 7, we show that the sufficient condition of Theorem 2 is not always satisfied, that is there exist some network instances where the optimal policy chooses a safe agent to apply the security measure.
 
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Metadata
Title
An Efficient Dynamic Allocation Mechanism for Security in Networks of Interdependent Strategic Agents
Authors
Farzaneh Farhadi
Hamidreza Tavafoghi
Demosthenis Teneketzis
S. Jamaloddin Golestani
Publication date
19-09-2018
Publisher
Springer US
Published in
Dynamic Games and Applications / Issue 4/2019
Print ISSN: 2153-0785
Electronic ISSN: 2153-0793
DOI
https://doi.org/10.1007/s13235-018-0284-4

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