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Resource Allocation with Karma Mechanisms

Kevin Riehl, Anastasios Kouvelas, Michail Makridis

Abstract

Monetary markets serve as established resource allocation mechanisms, typically achieving efficient solutions with limited information. However, they are susceptible to market failures, particularly under the presence of public goods, externalities, or inequality of economic power. Moreover, in many resource allocating contexts, money faces social, ethical, and legal constraints. Consequently, research increasingly explores artificial currencies and non-monetary markets, with Karma emerging as a notable concept. Karma, a non-tradeable, resource-inherent currency for prosumer resources, operates on the principles of contribution and consumption of specific resources. It embodies fairness, near incentive compatibility, Pareto-efficiency, robustness to population heterogeneity, and can incentivize a reduction in resource scarcity. The literature on Karma is scattered across disciplines, varies in scope, and lacks of conceptual clarity and coherence. Thus, this study undertakes a comprehensive review of the Karma mechanism, systematically comparing its resource allocation applications and elucidating overlooked mechanism design elements. Through a systematic mapping study, this review situates Karma within its literature context, offers a structured design parameter framework, and develops a road-map for future research directions.

Resource Allocation with Karma Mechanisms

Abstract

Monetary markets serve as established resource allocation mechanisms, typically achieving efficient solutions with limited information. However, they are susceptible to market failures, particularly under the presence of public goods, externalities, or inequality of economic power. Moreover, in many resource allocating contexts, money faces social, ethical, and legal constraints. Consequently, research increasingly explores artificial currencies and non-monetary markets, with Karma emerging as a notable concept. Karma, a non-tradeable, resource-inherent currency for prosumer resources, operates on the principles of contribution and consumption of specific resources. It embodies fairness, near incentive compatibility, Pareto-efficiency, robustness to population heterogeneity, and can incentivize a reduction in resource scarcity. The literature on Karma is scattered across disciplines, varies in scope, and lacks of conceptual clarity and coherence. Thus, this study undertakes a comprehensive review of the Karma mechanism, systematically comparing its resource allocation applications and elucidating overlooked mechanism design elements. Through a systematic mapping study, this review situates Karma within its literature context, offers a structured design parameter framework, and develops a road-map for future research directions.
Paper Structure (19 sections, 4 figures, 6 tables)

This paper contains 19 sections, 4 figures, 6 tables.

Table of Contents

  1. Introduction
  2. Review of the Karma Literature
  3. The origins of Karma
  4. Two decades of Karma
  5. Karma modelled as a game
  6. Karma Resource Allocation & Mechanism Design
  7. Future Research Directions
  8. Methodology
  9. Literature Review with Systematic Mapping Study
  10. Research Protocol
  11. Protocol Planning
  12. Literature Retrieval:
  13. Study Selection & Quality Assessment
  14. Classification & Analysis
  15. Mapping
  16. ...and 4 more sections

Figures (4)

  • Figure S1: Clusters in the literature corpus. This figure shows word clouds of selected, most frequent words for the six identified topic clusters. The size of words relates to their frequency in the documents.
  • Figure S2: Composition & structure of literature corpus. (A) This figure shows corpus' topic composition. Share of citing literature for a specific year is determined by LDA document-topic matrix probabilities. (B+C) These charts express similarity of topics depicted as topic distance by documents resp. by words (PCA of LDA's matrices into 2D). (D) This figure shows number of primary citations of Karma for each topic and year. (E) The pie chart displays share each topic has in the literature on average over observed period of two decades. Number in brackets describes how often "Karma" appears on average in works of this topic.
  • Figure S3: Two decades of Karma. (A) This figure shows primary citations (dashed line = citations per year with ordinate on right, black line = cumulative citations with ordinate on left). (B) This figure shows secondary citation. (C) This diagram shows number of cumulative primary (black) and secondary (dashed) citations divided by the number of years after publication. (D+E) These charts show number of times "Karma" appears per document, excluding the references. It indicates Karma's role in a paper (only citation or more intensively worked with concept).
  • Figure S4: Article search & selection process.