Mechanism Design

Mechanism Design is the theory of how to design incentives for strategic agents, such that the agents acting according to their selfish interests will result in a desired outcome. It can be applied to things like institution design, voting systems, school admissions, regulation of monopolists, market design, and auction design. Think of it as the engineering side of game theory, thinking backward from a desired goal, and designing structures that lead strategic agents to behave in a way that achieves that goal.

Important Concepts

See also:Related Page:Game Theory, Incentives, Principal-Agent Problems, Cryptocurrencies and blockchain, Public discourse

I keep wanting to search for Institution Design and finding this tag, which I think used to be called that. My understanding is that Mechanism Design is the technical jargon for some aspects of institution design, but I'm be surprised if it actually covered all the things I want to cover with that. I don't really have a recommendation of what to do but feel the current tag is inadequate in some way.

2Rob Bensinger2y
Not my area of expertise, but I'll note "mechanism design" is a bit confusing/ambiguous in a generalist technical forum (are we building mouse traps?). I imagine the ambiguity goes away in a context where everyone knows the topic is economics / game theory, which is probably where the term "mechanism design" typically gets used. So consider this a weak vote for picking a more self-explanatory name for the tag itself, then using the tag description page to explain what's meant and compare with overlapping standard terminology.
4Rob Bensinger2y
If 'mechanism design' isn't ideal, adding some qualifier might fix it, like 'social mechanism design' or 'economic mechanism design'. Or you could do something like 'group and institution design'. I suggest being mindful of both the denotations and connotations of the names chosen, since this may influence the direction of future discussion. E.g., 'designing institutions' naturally calls to mind for me 'designing large organizations', but it's less evocative to me of 'designing norms for LW meetup' or 'designing good political voting systems' (even though both of these apparently can fall under 'mechanism design'). Other terms, like 'group design' or 'coordination mechanism design', will make different things salient.
4Yoav Ravid10mo
I edited the page to add some description (including throwing "institution design" in there to make it show up in search results). I'm personally fine with keeping it as mechanism design, but if we want to change the name then I suggest "Incentive Design", and adding "Mechanism Design" in the description. It's basically the name I came up with before I knew mechanism design was a field and thought "There should really be a field or a profession that focuses on designing incentive structures". I think a separate tag for how to build institutions/cultures/groups, including the non-incentive-related things, could be good.
My personal preference is "Institution Design", with mechanism design in the first sentence of explanation.
I think this tag should cover, for example, auction mechanics. Auctions don't seem much like institutions to me
Well, similarly, I want a tag that's about Institution Design, including the parts of building institutions that are not mechanisms (like, culture and stuff). I'm a little salty because I originally created this tag and called it Institution Design, and then someone came and changed it. :P
I would also be salty
Maybe a tag-split would be in order. I think the actual technical, economic field of Mechanism Design gets discussed a bunch of LW. I'm not a huge fan of "Institution design" as a name since it's not actually an established name for a field (I think?), but it might have slightly different connotations.
2Rob Bensinger2y
'Designing institutions and coordination mechanisms' is long but pretty good, I think? It somewhat clarifies for me what I think the intended focus is, in a way that 'institution design' on its own doesn't. 'Designing X' is also less formal than 'X design', which suggests less that we're trying to supersede the standard academic terminology.