Integer Programming and Combinatorial Optimization
Volume 4513 of the series Lecture Notes in Computer Science pp 469-483
Optimal Efficiency Guarantees for Network Design Mechanisms
- Tim RoughgardenAffiliated withDepartment of Computer Science, Stanford University, 353 Serra Mall, Stanford, CA 94305
- , Mukund SundararajanAffiliated withDepartment of Computer Science, Stanford University, 353 Serra Mall, Stanford, CA 94305
Abstract
A cost-sharing problem is defined by a set of players vying to receive some good or service, and a cost function describing the cost incurred by the auctioneer as a function of the set of winners. A cost-sharing mechanism is a protocol that decides which players win the auction and at what prices. Three desirable but provably mutually incompatible properties of a cost-sharing mechanism are: incentive-compatibility, meaning that players are motivated to bid their true private value for receiving the good; budget-balance, meaning that the mechanism recovers its incurred cost with the prices charged; and efficiency, meaning that the cost incurred and the value to the players served are traded off in an optimal way.
Our work is motivated by the following fundamental question: for which cost-sharing problems are incentive-compatible mechanisms with good approximate budget-balance and efficiency possible? We focus on cost functions defined implicitly by NP-hard combinatorial optimization problems, including the metric uncapacitated facility location problem, the Steiner tree problem, and rent-or-buy network design problems. For facility location and rent-or-buy network design, we establish for the first time that approximate budget-balance and efficiency are simultaneously possible. For the Steiner tree problem, where such a guarantee was previously known, we prove a new, optimal lower bound on the approximate efficiency achievable by the wide and natural class of “Moulin mechanisms”. This lower bound exposes a latent approximation hierarchy among different cost-sharing problems.
- Title
- Optimal Efficiency Guarantees for Network Design Mechanisms
- Book Title
- Integer Programming and Combinatorial Optimization
- Book Subtitle
- 12th International IPCO Conference, Ithaca, NY, USA, June 25-27, 2007. Proceedings
- Pages
- pp 469-483
- Copyright
- 2007
- DOI
- 10.1007/978-3-540-72792-7_35
- Print ISBN
- 978-3-540-72791-0
- Online ISBN
- 978-3-540-72792-7
- Series Title
- Lecture Notes in Computer Science
- Series Volume
- 4513
- Series ISSN
- 0302-9743
- Publisher
- Springer Berlin Heidelberg
- Copyright Holder
- Springer Berlin Heidelberg
- Additional Links
- Topics
- Industry Sectors
- eBook Packages
- Editors
- Authors
-
- Tim Roughgarden (1)
- Mukund Sundararajan (1)
- Author Affiliations
-
- 1. Department of Computer Science, Stanford University, 353 Serra Mall, Stanford, CA 94305,
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