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Noam Nisan and Amir Ronen, from the [[Hebrew University of Jerusalem]], first coined "Algorithmic mechanism design" in a research paper published in 2001.<ref name="nisan">{{cite journal|url=http://iew3.technion.ac.il/~amirr/AMDJ.pdf|title=Algorithmic mechanism design|first=Noam|last=Nisan|coauthors=Amir Ronen|journal=Games and Economic Behavior|year=2001|issue=35|pages=166–196}}</ref>
It combines ideas such as utility maximization and mechanism design from [[economics]], rationality and [[Nash equilibrium]] from game theory, with such concepts as [[complexity]] and algorithm design from [[discrete mathematics]] and theoretical [[computer science]]. Examples of topics include networking, [[peering]], online auctions and exchanges, online advertising, and search engine's page ranking.
Algorithmic mechanism design differs from classical economic mechanism design in several respects. It typically employs the analytic tools of [[theoretical computer science]], such as [[worst case analysis]] and [[approximation ratio]]s, in contrast to classical mechanism design in economics which often makes distributional assumptions about the agents. It also considers computational constraints to be of central importance: mechanisms that cannot be efficiently implemented in polynomial time are not considered to be viable solutions to a mechanism design problem. This often, for example, rules out the classic economic mechanism, the [[Vickrey-Clarke-Groves auction]].
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