On May 29, Prof. Motty Perry from the University of Warwick provided an exciting seminar about the paper “Implementing the ‘Wisdom of the Crowd’”, which he co-authored with Ilan Kremer and Yishay Mansur.

The authors studied a new mechanism design problem that became highly relevant after the development of Internet advisor sites. The presenter began the seminar by providing examples of various Internet sites but mainly concentrated on TripAdvisor and Waze-mobile. The latter website develops GPS navigation based on information provided by its users. It is a social mobile application that offers free turn-by-turn navigation based on real traffic conditions as reported by its users. In order to be able to provide good recommendations, the app needs information on every possible route.

In order to get this information, from time to time the application recommends some drivers take aroute about which it has no information, but if the driver takes that route the app will get the desired information. Of course, no driver wants to be the one who is sent onaroute for the purpose of gathering information, so the application should choose very carefully whom to recommend the unknown route to.

In a similar manner, how can TripAdvisor have information about hotels, for example, when no one goes to them? Generally, the problem can be stated as follows: agents choose one by one action without knowing the reward of the action and the social planner wants to maximize the social welfare by optimal recommendation policy, taking into account agents’ self-interested and myopic character.

Prof.Perry presented a simple model and its solution. He concluded the seminar by mentioning an extension of the model that allows the planner to transfer money to the agents.

ISET would like to thank Proff. Motty Perry for presenting a seminar on a very interesting and novel topic to the ISET community.