Systems-compatible incentives

Selfish participants in a distributed system attempt to gain from the system without regard to how their actions may affect others. To maintain desirable system-wide properties in the presence of selfish users, designers are increasingly turning to the powerful mechanisms offered by economics and game theory. Combining the two fields of economics and systems design introduces new challenges of achieving incentive-compatibility in systems we can deploy in today´s Internet. In this paper, we explore the interactions between systems and the mechanisms that give users incentives to cooperate. Using findings from recent work on incentive-compatible systems, we discuss several economic mechanisms and assumptions: money, punishment, and altruism. We seek to understand when these mechanisms violate system properties. Among the potential pitfalls we present is a phenomenon we call the price of altruism: altruistic peers can impose a loss of social good in some systems. We also discuss systems-compatible mechanisms that have been used in real, distributed systems, and attempt to extract the underlying design principles that have led to their success.