Budget Feasible Mechanisms

We study a novel class of mechanism design problems in which the outcomes are constrained by the payments. This basic class of mechanism design problems captures many common economic situations, and yet it has not been studied, to our knowledge, in the past. We focus on the case of procurement auctions in which sellers have private costs, and the auctioneer aims to maximize a utility function on subsets of items, under the constraint that the sum of the payments provided by the mechanism does not exceed a given budget. Standard mechanism design ideas such as the VCG mechanism and its variants are not applicable here. We show that, for general functions, the budget constraint can render mechanisms arbitrarily bad in terms of the utility of the buyer. However, our main result shows that for the important class of submodular functions, a bounded approximation ratio is achievable. Better approximation results are obtained for subclasses of the submodular functions. We explore the space of budget feasible mechanisms in other domains and give a characterization under more restricted conditions

Rationality and Self-Interest in Peer to Peer Networks

Much of the existing work in peer to peer networking assumes that users will follow prescribed protocols without deviation. This assumption ignores the userr's ability to modify the behavior of an algorithm for self-interested reasons. We advocate a different model in which peer to peer users are expected to be rational and self-interested. This model is found in the emergent fields of Algorithmic Mechanism Design (AMD) and Distributed Algorithmic Mechanism Design (DAMD), both of which introduce game-theoretic ideas into a computational system. We, as designers, must create systems (peer to peer search, routing, distributed auctions, resource allocation, etc.) that allow nodes to behave rationally while still achieving good overall system outcomes. This paper has three goals. The first is to convince the reader that rationality is a real issue in peer to peer networks. The second is to introduce mechanism design as a tool that can be used when designing networks with rational nodes. The third is to describe three open problems that are relevant in the peer to peer setting but are unsolved in existing AMD/DAMD work. In particular, we consider problems that arise when a networking infrastructure contains rational agents.Engineering and Applied Science

Peer-to-Peer Networks: A Mechanism Design Approach

In this paper we use mechanism design approach to find the optimal file-sharing mechanism in a peer-to-peer network. This mechanism improves upon existing incentive schemes. In particular, we show that peer-approved scheme is never optimal and service-quality scheme is optimal only under certain circumstances. Moreover, we find that the optimal mechanism can be implemented by a mixture of peer-approved and service-quality schemes.peer-to-peer networks, mechanism design.

A distributed auction-based algorithm to allocate bandwidth over paths

Session 01 : Scheduling and bandwidth allocationInternational audienceIn the literature, Vickrey-Clark-Groves (VCG) double-sided auctions have been applied to inter-domain traffic exchange because they provide incentives to be truthful and lead to an efficient use of the network, among relevant properties of mechanism design. Unfortunately, the resulting resource allocation scheme is neither budget-balanced nor solvable in a decentralized way, two important properties. We present a different but more realistic auction-based algorithm for allocating bandwidth over paths to end users or ISPs, leading to a new budget-balanced pricing scheme for which allocations and charges can be computed in a decentralized way

Interdomain routing and games

We present a game-theoretic model that captures many of the intricacies of \emph{interdomain routing} in today's Internet. In this model, the strategic agents are source nodes located on a network, who aim to send traffic to a unique destination node. The interaction between the agents is dynamic and complex -- asynchronous, sequential, and based on partial information. Best-reply dynamics in this model capture crucial aspects of the only interdomain routing protocol de facto, namely the Border Gateway Protocol (BGP). We study complexity and incentive-related issues in this model. Our main results are showing that in realistic and well-studied settings, BGP is incentive-compatible. I.e., not only does myopic behaviour of all players \emph{converge} to a ``stable'' routing outcome, but no player has motivation to unilaterally deviate from the protocol. Moreover, we show that even \emph{coalitions} of players of \emph{any} size cannot improve their routing outcomes by collaborating. Unlike the vast majority of works in mechanism design, our results do not require any monetary transfers (to or by the agents).Interdomain Routing; Network Games; BGP protocol;