Algorithmic mechanism design (extended abstract)

We consider algorithmic problems in a distributed setting where the participants annot be assumed to follow the algorithm but rather their own self-interest. As such pxticipants, termed agents, are capable of manipulating the algorithm, the algorithm designer should ensure in advance that the agents’ interests are best served by behaving correctly. Following notions from the field of mechanism design, we suggest a framework for studying such algorithms. In this model the algorithmic solution is adorned with payments to the participants and is termed a mechanism. The payments should be carefully chosen a6 to motivate all participants to act as the algorithm designer wishes. We apply the standard tools of mechanism design to algorithmic problems and in particular to the shortest path problem. Our main technical contribution concerns the study of a representative problem, task scheduling, for which the standard tools do not suffice. We present several theorems regarding this problem including an approximation me&anism, lower bounds and a randomized mechanism. We also suggest and motivate extensions to the basic model and prove improved upper bounds in the extended model. Many open problems are suggested as well.

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