Inducing Equilibria via Incentives: Simultaneous Design-and-Play Ensures Global Convergence. (arXiv:2110.01212v3 [cs.GT] UPDATED)

To regulate a social system comprised of self-interested agents, economic
incentives are often required to induce a desirable outcome. This incentive
design problem naturally possesses a bilevel structure, in which a designer
modifies the rewards of the agents with incentives while anticipating the
response of the agents, who play a non-cooperative game that converges to an
equilibrium. The existing bilevel optimization algorithms raise a dilemma when
applied to this problem: anticipating how incentives affect the agents at
equilibrium requires solving …

arxiv convergence design equilibria global