Nonbossy Mechanisms: Mechanism Design Robust to Secondary Goals

Abstract: We study mechanism design when agents may have hidden secondary goals which will manifest as non-trivial preferences among outcomes for which their primary utility is the same. We show that in such cases, a mechanism is robust against strategic manipulation if and only if it is not only incentive-compatible, but also nonbossy -- a well-studied property in the context of matching and allocation mechanisms. We give complete characterizations of incentive-compatible and nonbossy mechanisms in various settings, including auctions with single-parameter agents and public decision settings where all agents share a common outcome. In particular, we show that in the single-item setting, a mechanism is incentive-compatible, individually rational, and nonbossy if and only if it is a sequential posted-price mechanism. In contrast, we show that in more general single-parameter environments, there exist mechanisms satisfying our characterization that significantly outperform sequential posted-price mechanisms in terms of revenue or efficiency (sometimes by an exponential factor).