Efficient signal proportional allocation (ESPA) mechanisms: decentralized social welfare maximization for divisible resources

We address the problem of devising efficient decentralized allocation mechanisms for a divisible resource, which is critical to many technological domains such as traffic management on the Internet and bandwidth allocation to agents in ad hoc wireless networks. We introduce a class of efficient signal proportional allocation (ESPA) mechanisms that yields an allocation which maximizes social welfare with minimal signaling and computational requirements for the resource. Revenue limits for this class are obtained and a sequence of schemes that approach these limits arbitrarily closely are given. We also present a locally stable negotiation scheme applicable to the entire class and illustrate efficiency and revenue properties through simulation.

[1]  T. Başar,et al.  Nash Equilibrium and Decentralized Negotiation in Auctioning Divisible Resources , 2003 .

[2]  Frank Kelly,et al.  Rate control for communication networks: shadow prices, proportional fairness and stability , 1998, J. Oper. Res. Soc..

[3]  Noam Nisan,et al.  Computationally feasible VCG mechanisms , 2000, EC '00.

[4]  Aurel A. Lazar,et al.  Market mechanisms for network resource sharing , 1999 .

[5]  E. H. Clarke.  Multipart pricing of public goods , 1971 .

[6]  B. Hajek,et al.  Optimal allocation of a divisible good to strategic buyers , 2004, 2004 43rd IEEE Conference on Decision and Control (CDC) (IEEE Cat. No.04CH37601).

[7]  Theodore Groves,et al.  Incentives in Teams , 1973 .

[8]  Jeffrey K. MacKie-Mason,et al.  Pricing the Internet , 1995 .

[9]  Desmond P. Taylor,et al.  A Generalized Processor Sharing Approach to Flow Control in Integrated Services Networks: The SingleNode Case , 2007 .

[10]  Tamer Basar,et al.  Coalition formation in proportionally fair divisible auctions , 2003, AAMAS '03.

[11]  John N. Tsitsiklis,et al.  Efficiency loss in a network resource allocation game: the case of elastic supply , 2004, IEEE Transactions on Automatic Control.

[12]  Catherine Rosenberg,et al.  A game theoretic framework for bandwidth allocation and pricing in broadband networks , 2000, TNET.

[13]  Abhay Parekh,et al.  A generalized processor sharing approach to flow control in integrated services networks: the single-node case , 1993, TNET.

[14]  R.T. Maheswaran,et al.  Social welfare of selfish agents: motivating efficiency for divisible resources , 2004, 2004 43rd IEEE Conference on Decision and Control (CDC) (IEEE Cat. No.04CH37601).

[15]  William Vickrey,et al.  Counterspeculation, Auctions, And Competitive Sealed Tenders , 1961 .

[16]  Hal R. Varian,et al.  Economic Mechanism Design for Computerized Agents , 1995, USENIX Workshop on Electronic Commerce.

[17]  Robert B. Wilson.  Auctions of Shares , 1979 .