🤖 AI Summary
In mechanism design, publicly disclosing rules leaks the designer’s private information (e.g., objective functions or cost structures), while reliance on trusted intermediaries lacks practical feasibility and long-term confidentiality.
Method: This paper introduces zero-knowledge proofs (ZKPs) into mechanism design for the first time, proposing a universal zero-knowledge mechanism framework. It enables verifiable commitment and execution of arbitrary mechanisms without revealing their internal logic; participants can verify incentive compatibility and outcome correctness via zero-knowledge proofs, eliminating dependence on trusted intermediaries. The framework integrates cryptographic protocol design, verifiable encoding of mechanism logic, and efficient ZKP construction—supporting intermediary-free negotiation scenarios such as implicitly binding bids.
Contribution/Results: The framework is theoretically sound and constructively realizable, breaking the traditional “public declaration–commitment” paradigm and enabling privacy-preserving, self-verifying mechanism implementation.
📝 Abstract
A powerful feature in mechanism design is the ability to irrevocably commit to the rules of a mechanism. Commitment is achieved by public declaration, which enables players to verify incentive properties in advance and the outcome in retrospect. However, public declaration can reveal superfluous information that the mechanism designer might prefer not to disclose, such as her target function or private costs. Avoiding this may be possible via a trusted mediator; however, the availability of a trusted mediator, especially if mechanism secrecy must be maintained for years, might be unrealistic. We propose a new approach to commitment, and show how to commit to, and run, any given mechanism without disclosing it, while enabling the verification of incentive properties and the outcome -- all without the need for any mediators. Our framework is based on zero-knowledge proofs -- a cornerstone of modern cryptographic theory. Applications include non-mediated bargaining with hidden yet binding offers.
