We aim to reduce the social cost of congestion in many smart city applications. In our model of congestion, agents interact over limited resources after receiving signals from a central agent that observes the state of congestion in real time. Under natural models of agent populations, we develop new signalling schemes and show that by introducing a non-trivial amount of uncertainty in the signals, we reduce the social cost of congestion, i.e., improve social welfare. The signalling schemes are efficient in terms of both communication and computation, and are consistent with past observations of the congestion. Moreover, the resulting population dynamics converge under reasonable assumptions.
We consider a statistical decision problem faced by a two player organization whose members may not agree on outcome evaluations and prior probabilities. One player is specialized in gathering information and transmitting it to the other, who takes the decision. This process is modeled as a game. Qualitative properties of the equilibria are analyzed. The impact of improving the quality of available information on the equilibrium welfares of the two individuals is studied. Better information generally may not improve welfare. We give conditions under which it will. 1. Summary Bohnenblust, Shapley, and Sherman [2] have introduced a method of comparing two sampling procedures or experiments; essentially their concept is that one experiment a is more informative than a second experiment ,, a v ,S, if, for every possible risk function, any risk attainable with , is also attainable with a. If a is a sufficient statistic for a procedure equivalent to ,S, a >,, it is shown that a v j3. In the case of dichotomies, the converse is proved. Whether > and v are equivalent in general is not known. Various properties of > and n are obtained, such as the following: if a > , and y is independent of both, then the combination (a, -y) > (#, y). An application to a problem in 2 X 2 tables is discussed. This paper reviews literature on communication between informed experts and uninformed decision makers. The research provides some insight into what constitutes a persuasive statement and under what conditions a decision maker will benefit from consulting an expert. I classify the literature along four dimensions: strategic, technological, institutional, and cultural. To the extent that decision makers and experts have different preferences, communication creates strategic problems. Technological considerations describe the domain of uncertainty, the cost of acquiring information, and the cost of manipulating information. The institution determines who has responsibility for making decisions and the rules that govern communication. Cultural factors describe the way in which agents interpret language. This paper develops a model of strategic communication, in which a better-informed Sender (S) sends a possibly noisy signal to a Receiver (R), who then takes an action that determines the welfare of both. We characterize the set of Bayesian Nash equilibria under standard assumptions, and show that equilibrium signaling always takes a strikingly simple form, in which S partitions the support of the (scalar) variable that represents his private information and introduces noise into his signal by reporting, in effect, only which element of the partition his observation actually lies in. We show under further assumptions that before S observes his private information, the equilibrium whose partition has the greatest number of elements is Pareto-superior to all other equilibria, and that if agents coordinate on this equilibrium, R's equilibrium expected utility rises when agents' preferences become more similar. Since R bases his choice of action on rational expectations, this establishes a sense in which equilibrium signaling is more informative when agents' preferences are more similar.