Dynamic Resource Allocation with Karma: An Experimental Study
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arXiv
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| Main Authors: | , , , |
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| Format: | Preprint |
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2024
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| _version_ | 1866912879688548352 |
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| author | Elokda, Ezzat Bolognani, Saverio Dörfler, Florian Nax, Heinrich H. |
| author_facet | Elokda, Ezzat Bolognani, Saverio Dörfler, Florian Nax, Heinrich H. |
| contents | A system of non-tradable credits that flow between individuals like karma, hence proposed under that name, is a mechanism for repeated resource allocation that comes with attractive efficiency and fairness properties, in theory. In this study, we test karma in an online experiment in which human subjects repeatedly compete for a resource with time-varying and stochastic individual preferences or urgency to acquire the resource. We confirm that karma has significant and sustained welfare benefits even in a population with no prior training. We identify mechanism usage in contexts with sporadic high urgency, more so than with frequent moderate urgency, and implemented as a simple (binary) karma bidding scheme as particularly effective for welfare improvements: relatively larger aggregate efficiency gains are realized that are (almost) Pareto superior. These findings provide guidance for further testing and for future implementation plans of such mechanisms in the real world. |
| format | Preprint |
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arxiv_https___arxiv_org_abs_2404_02687 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Dynamic Resource Allocation with Karma: An Experimental Study Elokda, Ezzat Bolognani, Saverio Dörfler, Florian Nax, Heinrich H. General Economics Economics Computer Science and Game Theory Systems and Control A system of non-tradable credits that flow between individuals like karma, hence proposed under that name, is a mechanism for repeated resource allocation that comes with attractive efficiency and fairness properties, in theory. In this study, we test karma in an online experiment in which human subjects repeatedly compete for a resource with time-varying and stochastic individual preferences or urgency to acquire the resource. We confirm that karma has significant and sustained welfare benefits even in a population with no prior training. We identify mechanism usage in contexts with sporadic high urgency, more so than with frequent moderate urgency, and implemented as a simple (binary) karma bidding scheme as particularly effective for welfare improvements: relatively larger aggregate efficiency gains are realized that are (almost) Pareto superior. These findings provide guidance for further testing and for future implementation plans of such mechanisms in the real world. |
| title | Dynamic Resource Allocation with Karma: An Experimental Study |
| topic | General Economics Economics Computer Science and Game Theory Systems and Control |
| url | https://arxiv.org/abs/2404.02687 |