Limits on the Power of Cryptographic Cheap Talk.
Pavel Hubáček, Jesper Buus Nielsen, Alon Rosen
We revisit the question of whether cryptographic protocols can replace correlated equilibria mediators in two-player strategic games. This problem was first addressed by Dodis, Halevi and Rabin (CRYPTO 2000), who suggested replacing the mediator with a secure protocol and proved that their solution is stable in the Nash equilibrium (NE) sense, provided that the players are computationally bounded. We show that there exist two-player games for which no cryptographic protocol can implement the mediator in a sequentially rational way; that is, without introducing empty threats. This explains why all solutions so far were either sequentially unstable, or were restricted to a limited class of correlated equilibria (specifically, those that do not dominate any NE, and hence playing them does not offer a clear advantage over playing any NE). In the context of computational NE, we classify necessary and sufficient cryptographic assumptions for implementing a mediator that allows to achieve a given utility profile of a correlated equilibrium. The picture that emerges is somewhat different than the one arising in semi-honest secure two-party computation. Specifically, while in the latter case every functionality is either “complete" (i.e., implies Oblivious Transfer) or “trivial " (i.e., can be securely computed unconditionally), in the former there exist some “intermediate " utility profiles whose implementation is equivalent to the existence of one-way functions. 1
•Jan 1, 2013•0 citations