Incentive provision using intervention

Overcoming the inefficiency of non-cooperative out-comes poses an important challenge for network managers in achieving efficient utilization of network resources. This paper studies a class of incentive schemes based on intervention, which are aimed to drive self-interested users towards a system objective. A manager can implement an intervention scheme by introducing in the network an intervention device that is able to monitor the actions of users and to take an action that influences the network usage of users. We consider the case of perfect monitoring, where the intervention device can immediately observe the actions of users without errors. We also assume that there exist actions of the intervention device that are most and least preferred by all users and the intervention device, regardless of the actions of users. We derive analytical results about the outcomes achievable with intervention and optimal intervention rules, and illustrate the results with an example based on random access networks.