Decentralized Supply Chain Formation: A Market Protocol and Competitive Equilibrium Analysis

Supply chain formation is the process of determining the structure and terms of exchange relationships to enable a multilevel, multiagent production activity. We present a simple model of supply chains, highlighting two characteristic features: hierarchical subtask decomposition, and resource contention. To decentralize the formation process, we introduce a market price system over the resources produced along the chain. In a competitive equilibrium for this system, agents choose locally optimal allocations with respect to prices, and outcomes are optimal overall. To determine prices, we define a market protocol based on distributed, progressive auctions, and myopic, non-strategic agent bidding policies. In the presence of resource contention, this protocol produces better solutions than the greedy protocols common in the artificial intelligence and multiagent systems literature. The protocol often converges to high-value supply chains, and when competitive equilibria exist, typically to approximate competitive equilibria. However, complementarities in agent production technologies can cause the protocol to wastefully allocate inputs to agents that do not produce their outputs. A subsequent decommitment phase recovers a significant fraction of the lost surplus

On market-inspired approaches to propositional satisfiability

AbstractWe describe three market-inspired approaches to propositional satisfiability. The first is based on a formulation of satisfiability as production on a supply chain, where producers of particular variable assignments must acquire licenses to fail to satisfy particular clauses. Experiments show that although this general supply-chain protocol can converge to market allocations corresponding to satisfiable truth assignments, it is impractically slow. We find that a simplified market structure and a variation on the pricing method can improve performance significantly. We compare the performance of the three market-based protocols with distributed breakout algorithm and GSAT on benchmark 3-SAT problems. We identify a tradeoff between performance and economic realism in the market protocols, and a tradeoff between performance and the degree of decentralization between the market protocols and distributed breakout. We also conduct informal and experimental analyses to gain insight into the operation of price-guided search