On Proportionate and Truthful International Alliance Contributions: An Analysis of Incentive Compatible Cost Sharing Mechanisms to Burden Sharing
Abstract
Burden sharing within an international alliance is a contentious topic, especially in the current geopolitical environment, that in practice is generally imposed by a central authority's perception of its members' abilities to contribute. Instead, we propose a cost sharing mechanism such that burden shares are allocated to nations based on their honest declarations of the alliance's worth. We develop a set of multiobjective nonlinear optimization problem formulations that, respectively, impose Bayesian Incentive Compatible (BIC), Strategy proof(SP) or Group Strategy proof (GSP) mechanisms based on probabilistic inspection and deception penalties that are budget balanced and in the core. A feasible solution to these problems produce a game wherein a collectively honest declaration is an equilibrium to the game but the optimal solution considers the central authority preferences. The efficacy of three heuristic algorithms and the BARON global solver are analyzed to determine the superlative methodology for each problem. The associated Pareto fronts are examined to determine the tradeoff between inspections and penalties required to obtain truthfulness under stronger assumptions. Memory limitations are examined to ascertain when the approach can be utilized. Finally, we consider the type clustering and nations' distributions therein on a UNASUR sized alliance.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 23, 2017
- Accession Number
- AD1051579
Entities
People
- William N. Caballero
Organizations
- Air Force Institute of Technology