Multi-agent reinforcement learning (MARL) has emerged as a powerful framework for modeling autonomous agents that independently optimize their individual objectives. However, in mixed-motive MARL environments, rational self-interested behaviors often lead to collectively suboptimal outcomes situations commonly referred to as social dilemmas. A key challenge in addressing social dilemmas lies in accurately quantifying and representing them in a numerical form that captures how self-interested agent behaviors impact social welfare. To address this challenge, externalities in the economic concept is adopted and extended to denote the unaccounted-for impact of one agent's actions on others, as a means to rigorously quantify social dilemmas. Based on this measurement, a novel method, Learning Optimal Pigovian Tax (LOPT) is proposed. Inspired by Pigovian taxes, which are designed to internalize externalities by imposing cost on negative societal impacts, LOPT employs an auxiliary tax agent that learns an optimal Pigovian tax policy to reshape individual rewards aligned with social welfare, thereby promoting agent coordination and mitigating social dilemmas. We support LOPT with theoretical analysis and validate it on standard MARL benchmarks, including Escape Room and Cleanup. Results show that by effectively internalizing externalities that quantify social dilemmas, LOPT aligns individual objectives with collective goals, significantly improving social welfare over state-of-the-art baselines.

In Economics, the concept of externality refers to any indirect effect resulting from an interaction between players and affecting a third party without compensation. Most of the models within which externality has been studied assume that agents have perfect knowledge of their environment and preferences. This is a major hindrance to the practical implementation of many proposed solutions. To adress this issue, we consider a two-players bandit game setting where the actions of one of the player affect the other one. Building upon this setup, we extend the Coase theorem [Coase, 2013], which suggests that the optimal approach for maximizing the social welfare in the presence of externality is to establish property rights, i.e., enabling transfers and bargaining between the players. Nonetheless, this fundamental result relies on the assumption that bargainers possess perfect knowledge of the underlying game. We first demonstrate that in the absence of property rights in the considered online scenario, the social welfare breaks down. We then provide a policy for the players, which allows them to learn a bargaining strategy which maximizes the total welfare, recovering the Coase theorem under uncertainty.

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This is a major hindrance to the practical implementation of many proposed solutions.

In a setting with multiple buyers, a buyer's expected value for an experiment may

Modern AI systems increasingly operate inside markets and institutions where data, behavior, and incentives are endogenous. This paper develops an economic foundation for multi-agent learning by studying a principal-agent interaction in a Markov decision process with strategic externalities, where both the principal and the agent learn over time. We propose a two-phase incentive mechanism that first estimates implementable transfers and then uses them to steer long-run dynamics; under mild regret-based rationality and exploration conditions, the mechanism achieves sublinear social-welfare regret and thus asymptotically optimal welfare. Simulations illustrate how even coarse incentives can correct inefficient learning under stateful externalities, highlighting the necessity of incentive-aware design for safe and welfare-aligned AI in markets and insurance.

For example, if a news site generates articles that are liberal (resp., conservative), then it is most likely to attract additional users who are liberal (resp., conservative)

Graph Neural Networks (GNNs) have achieved outstanding performance across a wide range of graph-related tasks. However, their "black-box" nature poses significant challenges to their explainability, and existing methods often fail to effectively capture the intricate interaction patterns among nodes within the network. In this work, we propose a novel explainability framework, GraphEXT, which leverages cooperative game theory and the concept of social externalities. GraphEXT partitions graph nodes into coalitions, decomposing the original graph into independent subgraphs. By integrating graph structure as an externality and incorporating the Shapley value under externalities, GraphEXT quantifies node importance through their marginal contributions to GNN predictions as the nodes transition between coalitions. Unlike traditional Shapley value-based methods that primarily focus on node attributes, our GraphEXT places greater emphasis on the interactions among nodes and the impact of structural changes on GNN predictions. Experimental studies on both synthetic and real-world datasets show that GraphEXT outperforms existing baseline methods in terms of fidelity across diverse GNN architectures , significantly enhancing the explainability of GNN models.