Optimal Resource Allocation over Networks via Lottery-Based Mechanisms

Conference paper
Part of the Lecture Notes of the Institute for Computer Sciences, Social Informatics and Telecommunications Engineering book series (LNICST, volume 277)


We show that, in a resource allocation problem, the ex ante aggregate utility of players with cumulative-prospect-theoretic preferences can be increased over deterministic allocations by implementing lotteries. We formulate an optimization problem, called the system problem, to find the optimal lottery allocation. The system problem exhibits a two-layer structure comprised of a permutation profile and optimal allocations given the permutation profile. For any fixed permutation profile, we provide a market-based mechanism to find the optimal allocations and prove the existence of equilibrium prices. We show that the system problem has a duality gap, in general, and that the primal problem is NP-hard. We then consider a relaxation of the system problem and derive some qualitative features of the optimal lottery structure.


Resource allocation Networks Lottery Cumulative prospect theory 


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Copyright information

© ICST Institute for Computer Sciences, Social Informatics and Telecommunications Engineering 2019

Authors and Affiliations

  1. 1.University of California at BerkeleyBerkeleyUSA

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