Incentive-based search for efficient equilibria of the public goods game

A new distributed algorithm is proposed for finding PNEs with improved efficiency by the use of transfer of payoffs among players. For the simple version of PGG, it is shown that the proposed algorithm can stabilize an outcome that maximizes social welfare. For the general version of the game, the proposed procedure transforms any initial outcome into a stable solution at least as efficient as the initial outcome by using transfers. An extensive experimental evaluation on randomly generated PGGs demonstrates that whereas pure best-response dynamics converges on stable states that have lower efficiency than the initial outcome, the proposed procedure finds PNEs of higher efficiency.