Revenue in Truly Combinatorial Auctions and Adversarial Mechanism Design

Little is known about generating revenue in UNRESTRICTED combinatorial auctions. (In particular, the VCG mechanism has no revenue guarantees.) In this paper we determine how much revenue can be guaranteed in such auctions. Our analysis holds both in the standard model, when all players are independent and rational, as well as in a most adversarial model, where some players may bid collusively or even totally irrationally

Incentive Mechanism Design in Mobile Crowdsensing Systems

In the past few years, the popularity of Mobile Crowdsensing Systems (MCSs) has been greatly prompted, in which sensory data can be ubiquitously collected and shared by mobile devices in a distributed fashion. Typically, a MCS consists of a cloud platform, sensing tasks, and mobile users equipped with mobile devices, in which the mobile users carry out sensing tasks and receive monetary rewards as compensation for resource consumption ( e.g., energy, bandwidth, and computation) and risk of privacy leakage ( e.g., location exposure). Compared with traditional mote-class sensor networks, MCSs can reduce the cost of deploying specialized sensing infrastructures and enable many applications that require resources and sensing modalities beyond the current mote-class sensor processes as today’s mobile devices (smartphones (iPhones, Sumsung Galaxy), tablets (iPad) and vehicle-embedded sensing devices (GPS)) integrate more computing, communication, and storage resources than traditional mote-class sensors. The current applications of MCSs include traffic congestion detection, wireless indoor localization, pollution monitoring, etc . There is no doubt that one of the most significant characteristics of MCSs is the active involvement of mobile users to collect and share sensory data. In this dissertation, we study the incentive mechanism design in mobile crowdsensing system with consideration of economic properties. Firstly, we investigate the problem of joining sensing task assignment and scheduling in MCSs with the following three considerations: i) partial fulfillment, ii) attribute diversity, and iii) price diversity. Then, we design a distributed auction framework to allow each task owner to independently process its local auction without collecting global information in a MCS, reducing communication cost. Next, we propose a cost-preferred auction scheme (CPAS) to assign each winning mobile user one or more sub- working time durations and a time schedule-preferred auction scheme (TPAS) to allocate each winning mobile user a continuous working time duration. Secondly, we focus on the design of an incentive mechanism for an MCS to minimize the social cost. The social cost represents the total cost of mobile devices when all tasks published by the MCS are finished. We first present the working process of a MCS, and then build an auction market for the MCS where the MCS platform acts as an auctioneer and users with mobile devices act as bidders. Depending on the different requirements of the MCS platform, we design a Vickrey-Clarke-Groves (VCG)-based auction mechanism for the continuous working pattern and a suboptimal auction mechanism for the discontinuous working pattern. Both of them can ensure that the bidding of users are processed in a truthful way and the utilities of users are maximized. Through rigorous theoretical analysis and comprehensive simulations, we can prove that these incentive mechanisms satisfy economic properties and can be implemented in reasonable time complexcity. Next, we discuss the importance of fairness and unconsciousness of MCS surveillance applications. Then, we propose offline and online incentive mechanisms with fair task scheduling based on the proportional share allocation rules. Furthermore, to have more sensing tasks done over time dimension, we relax the truthfulness and unconsciousness property requirements and design a (ε, μ)-unconsciousness online incentive mechanism. Real map data are used to validate these proposed incentive mechanisms through extensive simulations. Finally, future research topics are proposed to complete the dissertation

Improving the resilience of cyber-physical systems under strategic adversaries

Renewable energy resources challenge traditional energy system operations by substituting the stability and predictability of fossil fuel based generation with the unreliability and uncertainty of wind and solar power. Rising demand for green energy drives grid operators to integrate sensors, smart meters, and distributed control to compensate for this uncertainty and improve the operational efficiency of the grid. Real-time negotiations enable producers and consumers to adjust power loads during shortage periods, such as an unexpected outage or weather event, and to adapt to time-varying energy needs. While such systems improve grid performance, practical implementation challenges can derail the operation of these distributed cyber-physical systems. Network disruptions introduce instability into control feedback systems, and strategic adversaries can manipulate power markets for financial gain. This dissertation analyzes the impact of these outages and adversaries on cyber-physical systems and provides methods for improving resilience, with an emphasis on distributed energy systems. First, a financial model of an interdependent energy market lays the groundwork for profit-oriented attacks and defenses, and a game theoretic strategy optimizes attack plans and defensive investments in energy systems with multiple independent actors. Then attacks and defenses are translated from a theoretical context to a real-time energy market via denial of service (DoS) outages and moving target defenses. Analysis on two market mechanisms shows how adversaries can disrupt market operation, destabilize negotiations, and extract profits by attacking network links and disrupting communication. Finally, a low-cost DoS defense technique demonstrates a method that energy systems may use to defend against attacks

MATHEMATICAL PROGRAMMING ALGORITHMS FOR NETWORK OPTIMIZATION PROBLEMS

In the thesis we consider combinatorial optimization problems that are defined by means of networks. These problems arise when we need to take effective decisions to build or manage network structures, both satisfying the design constraints and minimizing the costs. In the thesis we focus our attention on the four following problems: - The Multicast Routing and Wavelength Assignment with Delay Constraint in WDM networks with heterogeneous capabilities (MRWADC) problem: this problem arises in the telecommunications industry and it requires to define an efficient way to make multicast transmissions on a WDM optical network. In more formal terms, to solve the MRWADC problem we need to identify, in a given directed graph that models the WDM optical network, a set of arborescences that connect the source of the transmission to all its destinations. These arborescences need to satisfy several quality-of-service constraints and need to take into account the heterogeneity of the electronic devices belonging to the WDM network. - The Homogeneous Area Problem (HAP): this problem arises from a particular requirement of an intermediate level of the Italian government called province. Each province needs to coordinate the common activities of the towns that belong to its territory. To practically perform its coordination role, the province of Milan created a customer care layer composed by a certain number of employees that have the task to support the towns of the province in their administrative works. For the sake of efficiency, the employees of this customer care layer have been partitioned in small groups and each group is assigned to a particular subset of towns that have in common a large number of activities. The HAP requires to identify the set of towns assigned to each group in order to minimize the redundancies generated by the towns that, despite having some activities in common, have been assigned to different groups. Since, for both historical and practical reasons, the towns in a particular subset need to be adjacent, the HAP can be effectively modeled as a particular graph partitioning problem that requires the connectivity of the obtained subgraphs and the satisfaction of nonlinear knapsack constraints. - Knapsack Prize Collecting Steiner Tree Problem (KPCSTP): to implement a Column Generation algorithm for the MRWADC problem and for the HAP, we need also to solve the two corresponding pricing problems. These two problems are very similar, both of them require to find an arborescence, contained in a given directed weighted graph, that minimizes the difference between its cost and the prizes associated with the spanned nodes. The two problems differ in the side constraints that their feasible solutions need to satisfy and in the way in which the cost of an arborescence is defined. The ILP formulations and the resolution methods that we developed to tackle these two problems have many characteristics in common with the ones used to solve other similar problems. To exemplify these similarities and to summarize and extend the techniques that we developed for the MRWADC problem and for the HAP, we also considered the KPCSTP. This problem requires to find a tree that minimizes the difference between the cost of the used arcs and the profits of the spanned nodes. However, not all trees are feasible: the sum of the weights of the nodes spanned by a feasible tree cannot exceed a given weight threshold. In the thesis we propose a computational comparison among several optimization methods for the KPCSTP that have been either already proposed in the literature or obtained modifying our ILP formulations for the two previous pricing problems. - The Train Design Optimization (TDO) problem: this problem was the topic of the second problem solving competition, sponsored in 2011 by the Railway Application Section (RAS) of the Institute for Operations Research and the Management Sciences (INFORMS). We participated to the contest and we won the second prize. After the competition, we continued to work on the TDO problem and in the thesis we describe the improved method that we have obtained at the end of this work. The TDO problem arises in the freight railroad industry. Typically, a freight railroad company receives requests from customers to transport a set of railcars from an origin rail yard to a destination rail yard. To satisfy these requests, the company first aggregates the railcars having the same origin and the same destination in larger blocks, and then it defines a trip plan to transport the obtained blocks to their correct destinations. The TDO problem requires to identify a trip plan that efficiently uses the limited resources of the considered rail company. More formally, given a railway network, a set of blocks and the segments of the network in which a crew can legally drive a train, the TDO problem requires to define a set of trains and the way in which the given blocks can be transported to their destinations by these trains, both satisfying operational constraints and minimizing the transportation costs

Computing with strategic agents

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Electrical Engineering and Computer Science, 2005.Includes bibliographical references (p. 179-189).This dissertation studies mechanism design for various combinatorial problems in the presence of strategic agents. A mechanism is an algorithm for allocating a resource among a group of participants, each of which has a privately-known value for any particular allocation. A mechanism is truthful if it is in each participant's best interest to reveal his private information truthfully regardless of the strategies of the other participants. First, we explore a competitive auction framework for truthful mechanism design in the setting of multi-unit auctions, or auctions which sell multiple identical copies of a good. In this framework, the goal is to design a truthful auction whose revenue approximates that of an omniscient auction for any set of bids. We focus on two natural settings - the limited demand setting where bidders desire at most a fixed number of copies and the limited budget setting where bidders can spend at most a fixed amount of money. In the limit demand setting, all prior auctions employed the use of randomization in the computation of the allocation and prices.(cont.) Randomization in truthful mechanism design is undesirable because, in arguing the truthfulness of the mechanism, we employ an underlying assumption that the bidders trust the random coin flips of the auctioneer. Despite conjectures to the contrary, we are able to design a technique to derandomize any multi-unit auction in the limited demand case without losing much of the revenue guarantees. We then consider the limited budget case and provide the first competitive auction for this setting, although our auction is randomized. Next, we consider abandoning truthfulness in order to improve the revenue properties of procurement auctions, or auctions that are used to hire a team of agents to complete a task. We study first-price procurement auctions and their variants and argue that in certain settings the payment is never significantly more than, and sometimes much less than, truthful mechanisms. Then we consider the setting of cost-sharing auctions. In a cost-sharing auction, agents bid to receive some service, such as connectivity to the Internet. A subset of agents is then selected for service and charged prices to approximately recover the cost of servicing them.(cont.) We ask what can be achieved by cost -sharing auctions satisfying a strengthening of truthfulness called group-strategyproofness. Group-strategyproofness requires that even coalitions of agents do not have an incentive to report bids other than their true values in the absence of side-payments. For a particular class of such mechanisms, we develop a novel technique based on the probabilistic method for proving bounds on their revenue and use this technique to derive tight or nearly-tight bounds for several combinatorial optimization games. Our results are quite pessimistic, suggesting that for many problems group-strategyproofness is incompatible with revenue goals. Finally, we study centralized two-sided markets, or markets that form a matching between participants based on preference lists. We consider mechanisms that output matching which are stable with respect to the submitted preferences. A matching is stable if no two participants can jointly benefit by breaking away from the assigned matching to form a pair.(cont.) For such mechanisms, we are able to prove that in a certain probabilistic setting each participant's best strategy is truthfulness with high probability (assuming other participants are truthful as well) even though in such markets in general there are provably no truthful mechanisms.by Nicole Immorlica.Ph.D