While the classic Vickrey-Clarke-Groves mechanism ensures incentive compatibility for a static one-shot game, it does not appear to be feasible to construct a dominant truth-telling mechanism for agents that are stochastic dynamic systems. The contribution of this paper is to show that for a set of LQG agents a mechanism consisting of a sequence of layered payments over time decouples the intertemporal effect of current bids on future payoffs and ensures truth-telling of dynamic states by their agents, if system parameters are known and agents are rational... (read more)
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