Request for Information (RFI)

DARPA-SN-18-06
Foundations for Strategic Mechanism Design

Responses Accepted: Until 1:00 PM (Eastern) on November 21, 2017

Point of Contact: Dr. John Paschkewitz, Program Manager, DARPA/DSO
Email Address: DARPA-SN-18-06@darpa.mil

The Defense Advanced Research Projects Agency (DARPA) Defense Sciences Office (DSO) is
requesting information on mathematical and algorithmic foundations for the practical design and
assessment of strategic mechanisms. Of ultimate interest are capabilities to strategically assess
and manage the actions of state and non-state actors utilizing a mixture of economic, diplomatic,
social, and military options. Development of strategic mechanisms will require the integration of
recent advances in game theory, behavioral economics, computer science, and artificial
intelligence.

Definitions that are relevant for responding to the RFI are:

Mechanism design: The art of designing the rules of a game to achieve a specific
desired outcome 1 and can be viewed as a game theoretic inverse problem.
Mechanisms are protocols to incent collective decision making among self-interested
agents 2 and common examples are auctions and voting schemes.
Strategic mechanisms are defined here as structures and rules engineered to achieve
desired strategic outcomes such as deterrence or coercion.

Currently, the tools to meaningfully assess the likelihood or viability of strategic actions are
limited to combinations of wargaming and modeling. Each of these tools has multiple
limitations. Wargaming at the strategic level is decision centric and heavily dependent on both
priming of the players and the question construction to elicit meaningful responses. Even when
successful, defining strategies that can achieve objectives requires repeated assessment of
scenarios that must be carefully constructed. This wargaming art can be complemented by
modeling methods to capture details that may influence decision makers (e.g., relative combat
power of military assets), but principled inclusion of relevant factors such as adversarial
reasoning, information warfare, and economic incentives is lacking. Given the changing nature
of conflict 3, consideration of these factors is critical.

Construction of a strategy is ultimately about creation of a mechanism. Even simple mechanisms

such as auctions and voting schemes may have surprising outcomes because the agents make
decisions in a richly strategic way. In the scenarios of interest in this RFI, the mechanisms

1
The 2007 Nobel Prize in Economic Sciences was awarded for advancements in this area, e.g.,
https://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2007/myerson-lecture.html,
https://scholar.harvard.edu/files/maskin/files/eric_s._maskin_-_prize_lecture.pdf
2
E.g., Dash, R.K. et al., (2003). Computational Mechanism Design: A Call to Arms. IEEE Intelligent Systems, 18(6).
3
As noted in Global Trends (2017). Disrupting societies will become more common, with long-range precision
weapons, cyber, and robotic systems to target infrastructure from afar
(https://www.dni.gov/files/documents/nic/GT-Full-Report.pdf)

RFI DARPA-SN-18-06 1
protocol may be a set of rules, norms, and structural factors that incentivize other state or non-
state actors to act in such a way that a desired strategic outcome for a single actor is realized.
These protocols can include dynamic economic and trade structures, diplomatic alliances,
military posture and action, and infrastructure. Theory for designing mechanisms that fully
utilize these many degrees of freedom is largely unexplored.

In addition, strategic reasoning typically violates the rational actor assumptions in game theory,
and therefore requires the integration of behavioral factors such as social norms, behavioral
influence, and context-dependent assessments of utility such as loss aversion. Integration of
these effects and efficient exploration of mechanism designs and outcomes will require
computationally tractable implementation of mechanism design and judicious application of
nascent artificial intelligence techniques to explore ranges of possible outcomes.

Demonstration of a capability for design and assessment of strategic mechanisms will require
foundational advances catalyzed by the integration of the aforementioned research areas.
DARPA is interested in innovative and novel concepts that could enable a breakthrough in the
ability to design and assess strategic mechanisms that create and prevent surprise. The following
areas are of interest in this RFI:

1. Strategic mechanism design theory and application: While game-theoretic

computational mechanism design has been investigated in the multi-agent system
community for many years and applied to comparatively simple systems such as
distributed computation, there has been limited work on problems of strategic 4 and
economic 5 interest. There are two aspects of these topics that respondents should
address:
a. Complexity: Game theory provides principled methods for assessing strategic
reasoning and has provided strategic insight for cyber-security 6, but does not scale
well to problems of the level of complexity described here. Basic questions of
defining preference elicitation formulation, communications complexity, strategy
selection, and equilibria (for example, using maximum entropy constructs) remain
challenging. Clearly described approaches to encode and capture these factors are of
interest, noting that it is critical to correctly capture the differences in adversary
perception and potential action spaces.
b. Computability: It is well known that analytical mechanism design problems can be
computationally intractable. Recent results 7 on computational mechanism design
using compact game representations highlight a possible path forward. Of interest are
examples of mechanism design approaches that can, in a computationally tractable

4
E.g., Myerson, R. (2006). Federalism and Incentives for Success of Democracy. Quarterly Journal of Political
Science 1:3-23 and Makowsky, R. and Smaldino P. (2016). The evolution of power and the divergence of
cooperative norms. Journal of Economic Behavior & Organization 126: 75-88, which utilizes game theory but does
not discuss mechanisms.
5
E.g., Liu, H. (2015). Essays on Dynamic Mechanism Design. Ph.D. Dissertation, University of Rochester
6
E.g., Pavlovic, D. (2011). Gaming Security by Obscurity and van Dijk, M. et al. (2013). FlipIt: The Game of Stealthy
Takeover. Journal of Cryptology 26:655-713.
7
Thompson et al. (2017). The Positronic Economist: A computational system for analyzing economic mechanisms.
Association for the Advancement of Artificial Intelligence.

RFI DARPA-SN-18-06 2
 manner:
i. capture a range of imperfect and incomplete information games, including
cooperative, competitive and coalitional games;
ii. encode adaptive mechanisms to modify the rules or structures over time and in
response to learning and reflexivity;
iii. capture network and dynamic effects integral to problems in the economic and
information domains of interest here, including information state and
asymmetries to include deception and deceit.

2. Behaviorally informed mechanisms: The integration of irrational human behavior into

game theoretic models and mechanisms remains challenging and largely unexplored in
the domains of interest. Integration of well-known phenomena such as social norms,
prospect theory, anchoring and priming, and trust heuristics in mechanism design remains
ad hoc and inconsistent, although there is growing empirical understanding 8 of
application. Respondents should address how and why certain behavioral factors are
included, how they are encoded in a principled way in context, and highlight a potential
path to integration in mechanism design. Respondents should also address learning
mechanisms on the part of actors, particularly in adversarial settings. Research from the
behavioral finance or related communities defining design principles for empirically
proven mechanisms for incentivizing certain behaviors is of interest. Models or
formalisms for capturing idiosyncratic risk associated with individual decision makers are
not of interest.

3. Experimentation: While the complexity of the problem is integral to practical application

and underlying difficulty, certain key factors can and should be abstracted into simpler
problems for purposes of advancing foundational capabilities. Respondents should
identify core hypotheses required in the development of strategic mechanism design and
identify potentially simpler tests that can assess the viability of new mechanisms or
importance of key factors. For example, simple exploration of mechanisms employing
multiple modalities of deterrence could be explored using modified rules within the game
Diplomacy 9. Respondents should address how to meaningfully capture a wider range of
adversarial reasoning and motivation factors than currently accessible using scenario-
informed role playing. Exploration of larger state spaces of both outcomes and
mechanism design may be assisted using nascent AI (Artificial Intelligence) approaches 10
that are well suited to imperfect or incomplete information games. Respondents should
highlight a path from the simple tests to implementation of mechanism design using a
more complex geopolitical strategic game.

For all of these areas, approaches utilizing bottom-up complex adaptive system formalisms,
agent-based modeling approaches lacking encoding of strategic insight, incremental extensions
to existing wargaming or network modeling approaches, and/or entirely empirical and heuristic
social science research are not of interest.
8
Datta, S. and Mullainathan, S. (2014). Behavioral Design: A New Approach to Development Policy. Review of
Income and Wealth, 60: 735. doi:10.1111/roiw.12093
9
https://en.wikipedia.org/wiki/Diplomacy_(game)
10
Moravcik, M. et al. (2017). DeepStack: Expert-Level Artificial Intelligence in Heads-Up No-Limit Poker, Science,
356 (6337), 508-513. doi: 10.1126/science.aam6960

RFI DARPA-SN-18-06 3
SUBMISSION FORMAT
Respondents to this RFI are encouraged to be as succinct as possible, while also providing
actionable insight. Responses are limited to 10 pages (1 page cover sheet + 8 pages text + 1 page
bibliography/references). Format specifications for responses include 12-point font, single-
spaced, single-sided, 8.5 by 11-inch paper, with 1-inch margins in MS Word or Adobe PDF
format.

Respondents are responsible for clearly identifying proprietary information. Responses

containing proprietary information must have each page containing such information clearly
marked with a label such as Proprietary or Company Proprietary. DO NOT INCLUDE
ANY CLASSIFIED INFORMATION IN THE RFI RESPONSE.

A. Cover Sheet (1 page): Provide the following information.

1. Response Title
2. Technical point of contact name, organization, telephone number, and email
address
3. Indicate the RFI research area(s) addressed by the response

B. Technical Description (8 pages)

C. Bibliography/References (1 page)

SUBMISSION INSTRUCTIONS AND CONTACT INFORMATION

All responses to this RFI must be emailed to DARPA-SN-18-06@darpa.mil. Responses will be
accepted any time from the publication of this RFI until 1:00 PM (Eastern) on November 21,
2017. Early responses are encouraged.

All technical and administrative correspondence and questions regarding this RFI should also be
sent to the same email address. Emails sent directly to the Program Manager may result in
delayed/no response.

ELIGIBILITY
DARPA invites participation from all those engaged in related research activities and appreciates
responses from all capable and qualified sources including, but not limited to, universities,
university-affiliated research centers (UARCs), Federally-Funded Research and Development
Centers (FFRDCs), private or public companies and Government research laboratories.

DISCLAIMERS AND IMPORTANT NOTES

This is an RFI issued solely for information and new program planning purposes; it does
not constitute a formal solicitation for proposals. In accordance with FAR 15.201(e),
responses to this RFI are not offers and cannot be accepted by the Government as such.
Responses do not bind DARPA to any further actions related to this topic including
requesting follow-on proposals from respondents to this RFI.
Submission is voluntary and is not required to propose to a subsequent Broad Agency
Announcement (BAA) (if any) or other research solicitation (if any) on this topic.
DARPA will not provide reimbursement for costs incurred in responding to this RFI.

RFI DARPA-SN-18-06 4
 Respondents are advised that DARPA is under no obligation to acknowledge receipt of
the information received or provide feedback to respondents with respect to any
information submitted under this RFI.
DARPA will disclose submission contents only for the purpose of review. Submissions
may be reviewed by the Government (DARPA and partners); Federally Funded Research
and Development Centers (FFRDCs); and Scientific, Engineering and Technical
Assistance (SETA) support contractors.

RFI DARPA-SN-18-06 5