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A system of non-tradable credits that flow between individuals like karma, hence proposed under that name, is a mechanism for repeated resource allocation that comes with attractive efficiency and fairness properties, in theory. In this study, we test karma in an online experiment in which human subjects repeatedly compete for a resource with time-varying and stochastic individual preferences or urgency to acquire the resource. We confirm that karma has significant and sustained welfare benefits even in a population with no prior training. We identify mechanism usage in contexts with sporadic high urgency, more so than with frequent moderate urgency, and implemented as a simple (binary) karma bidding scheme as particularly effective for welfare improvements: relatively larger aggregate efficiency gains are realized that are (almost) Pareto superior. These findings provide guidance for further testing and for future implementation plans of such mechanisms in the real world.

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The USC Viterbi School of Engineering is innovative, elite and internationally recognized for creating models of education, research and commercialization.

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Explore Student ResourcesCS Student Organizations Get Involved with CS-related Student Organizations As a Viterbi student, your experience is heightened with active participation in student organizations! The student organizations listed below eagerly accept Computer Science students as members.  Please also visit the full list of Viterbi Student Organization and USC Student Organizations for even more opportunities to get involved and expand ... Read More