4 research outputs found
Sponsored Search, Market Equilibria, and the Hungarian Method
Matching markets play a prominent role in economic theory. A prime example of
such a market is the sponsored search market. Here, as in other markets of that
kind, market equilibria correspond to feasible, envy free, and bidder optimal
outcomes. For settings without budgets such an outcome always exists and can be
computed in polynomial-time by the so-called Hungarian Method. Moreover, every
mechanism that computes such an outcome is incentive compatible. We show that
the Hungarian Method can be modified so that it finds a feasible, envy free,
and bidder optimal outcome for settings with budgets. We also show that in
settings with budgets no mechanism that computes such an outcome can be
incentive compatible for all inputs. For inputs in general position, however,
the presented mechanism---as any other mechanism that computes such an outcome
for settings with budgets---is incentive compatible
An Incentive Compatible, Efficient Market for Air Traffic Flow Management
We present a market-based approach to the Air Traffic Flow Management (ATFM)
problem. The goods in our market are delays and buyers are airline companies;
the latter pay money to the FAA to buy away the desired amount of delay on a
per flight basis. We give a notion of equilibrium for this market and an LP
whose solution gives an equilibrium allocation of flights to landing slots as
well as equilibrium prices for the landing slots. Via a reduction to matching,
we show that this equilibrium can be computed combinatorially in strongly
polynomial time. Moreover, there is a special set of equilibrium prices, which
can be computed easily, that is identical to the VCG solution, and therefore
the market is incentive compatible in dominant strategy.Comment: arXiv admin note: substantial text overlap with arXiv:1109.521