"Conspiracies, Cooperation and Power" Speaker: Yoram Bachrach, Microsoft Research Cambridge Date: Wednesday, 5 January 2011 Time: 12noon Place: Ross 201 Abstract: Cooperative game theory is all about how selfish agents might agree to collaborate and then share their spoils. It allows answering questions such as: - Would the political power balance change if a big party decided to split into two smaller parties? - Can selfish behavior jeopardize making mutually beneficial agreements? - How might pirates share a hidden treasure when they need each other to find it? Cooperation can be problematic when agents collaborate to attack an economic or political system. For example, agents participating in an auction can coordinate their bids in order to pay less for obtaining their items and political parties may strategically merge or split to increase their influence. I will discuss various aspects of such phenomena, focusing on collusion in auctions and attacks in decision making bodies. In weighted voting games, a known model for decision-making bodies, false-name attacks where agents merge and split can dramatically influence the distribution of power. Similarly, auctions based on the VCG mechanism are excellent in achieving truthful bids and an optimal allocation when agents do not cooperate, but are very susceptible to collusion. I will demonstrate such attacks in political systems and multi-unit or path procurement auctions, showing how the colluders can find their optimal joint attack strategies and reasonable agreements for sharing the gains. The analysis for both domains is based on the core and the Shapley value, prominent solution concepts from cooperative game theory.