A Game-Theoretic Model Motivated by the DARPA Network Challenge

Abstract: In this paper we propose a game-theoretic model to analyze events similar to the 2009 \emph{DARPA Network Challenge}, which was organized by the Defense Advanced Research Projects Agency (DARPA) for exploring the roles that the Internet and social networks play in incentivizing wide-area collaborations. The challenge was to form a group that would be the first to find the locations of ten moored weather balloons across the United States. We consider a model in which $N$ people (who can form groups) are located in some topology with a fixed coverage volume around each person's geographical location. We consider various topologies where the players can be located such as the Euclidean $d$-dimension space and the vertices of a graph. A balloon is placed in the space and a group wins if it is the first one to report the location of the balloon. A larger team has a higher probability of finding the balloon, but we assume that the prize money is divided equally among the team members. Hence there is a competing tension to keep teams as small as possible. \emph{Risk aversion} is the reluctance of a person to accept a bargain with an uncertain payoff rather than another bargain with a more certain, but possibly lower, expected payoff. In our model we consider the \emph{isoelastic} utility function derived from the Arrow-Pratt measure of relative risk aversion. The main aim is to analyze the structures of the groups in Nash equilibria for our model. For the $d$-dimensional Euclidean space ($d\geq 1$) and the class of bounded degree regular graphs we show that in any Nash Equilibrium the \emph{richest} group (having maximum expected utility per person) covers a constant fraction of the total volume.