Network Cournot Competition

Cournot competition is a fundamental economic model that represents firms competing in a single market of a homogeneous good. Each firm tries to maximize its utility---a function of the production cost as well as market price of the product---by deciding on the amount of production. In today's dynamic and diverse economy, many firms often compete in more than one market simultaneously, i.e., each market might be shared among a subset of these firms. In this situation, a bipartite graph models the access restriction where firms are on one side, markets are on the other side, and edges demonstrate whether a firm has access to a market or not. We call this game \emph{Network Cournot Competition} (NCC). In this paper, we propose algorithms for finding pure Nash equilibria of NCC games in different situations. First, we carefully design a potential function for NCC, when the price functions for markets are linear functions of the production in that market. However, for nonlinear price functions, this approach is not feasible. We model the problem as a nonlinear complementarity problem in this case, and design a polynomial-time algorithm that finds an equilibrium of the game for strongly convex cost functions and strongly monotone revenue functions. We also explore the class of price functions that ensures strong monotonicity of the revenue function, and show it consists of a broad class of functions. Moreover, we discuss the uniqueness of equilibria in both of these cases which means our algorithms find the unique equilibria of the games. Last but not least, when the cost of production in one market is independent from the cost of production in other markets for all firms, the problem can be separated into several independent classical \emph{Cournot Oligopoly} problems. We give the first combinatorial algorithm for this widely studied problem

The Max-Distance Network Creation Game on General Host Graphs

In this paper we study a generalization of the classic \emph{network creation game} in the scenario in which the $n$ players sit on a given arbitrary \emph{host graph}, which constrains the set of edges a player can activate at a cost of $\alpha \geq 0$ each. This finds its motivations in the physical limitations one can have in constructing links in practice, and it has been studied in the past only when the routing cost component of a player is given by the sum of distances to all the other nodes. Here, we focus on another popular routing cost, namely that which takes into account for each player its \emph{maximum} distance to any other player. For this version of the game, we first analyze some of its computational and dynamic aspects, and then we address the problem of understanding the structure of associated pure Nash equilibria. In this respect, we show that the corresponding price of anarchy (PoA) is fairly bad, even for several basic classes of host graphs. More precisely, we first exhibit a lower bound of $\Omega (\sqrt{ n / (1+\alpha)})$ for any $\alpha = o(n)$. Notice that this implies a counter-intuitive lower bound of $\Omega(\sqrt{n})$ for very small values of $\alpha$ (i.e., edges can be activated almost for free). Then, we show that when the host graph is restricted to be either $k$-regular (for any constant $k \geq 3$), or a 2-dimensional grid, the PoA is still $\Omega(1+\min\{\alpha, \frac{n}{\alpha}\})$, which is proven to be tight for $\alpha=\Omega(\sqrt{n})$. On the positive side, if $\alpha \geq n$, we show the PoA is $O(1)$. Finally, in the case in which the host graph is very sparse (i.e., $|E(H)|=n-1+k$, with $k=O(1)$), we prove that the PoA is $O(1)$, for any $\alpha$.Comment: 17 pages, 4 figure

Ascending-Price Algorithms for Unknown Markets

We design a simple ascending-price algorithm to compute a $(1+\varepsilon)$-approximate equilibrium in Arrow-Debreu exchange markets with weak gross substitute (WGS) property, which runs in time polynomial in market parameters and $\log 1/\varepsilon$. This is the first polynomial-time algorithm for most of the known tractable classes of Arrow-Debreu markets, which is easy to implement and avoids heavy machinery such as the ellipsoid method. In addition, our algorithm can be applied in unknown market setting without exact knowledge about the number of agents, their individual utilities and endowments. Instead, our algorithm only relies on queries to a global demand oracle by posting prices and receiving aggregate demand for goods as feedback. When demands are real-valued functions of prices, the oracles can only return values of bounded precision based on real utility functions. Due to this more realistic assumption, precision and representation of prices and demands become a major technical challenge, and we develop new tools and insights that may be of independent interest. Furthermore, our approach also gives the first polynomial-time algorithm to compute an exact equilibrium for markets with spending constraint utilities, a piecewise linear concave generalization of linear utilities. This resolves an open problem posed by Duan and Mehlhorn (2015).Comment: 33 page

On a Bounded Budget Network Creation Game

We consider a network creation game in which each player (vertex) has a fixed budget to establish links to other players. In our model, each link has unit price and each agent tries to minimize its cost, which is either its local diameter or its total distance to other players in the (undirected) underlying graph of the created network. Two versions of the game are studied: in the MAX version, the cost incurred to a vertex is the maximum distance between the vertex and other vertices, and in the SUM version, the cost incurred to a vertex is the sum of distances between the vertex and other vertices. We prove that in both versions pure Nash equilibria exist, but the problem of finding the best response of a vertex is NP-hard. We take the social cost of the created network to be its diameter, and next we study the maximum possible diameter of an equilibrium graph with n vertices in various cases. When the sum of players' budgets is n-1, the equilibrium graphs are always trees, and we prove that their maximum diameter is Theta(n) and Theta(log n) in MAX and SUM versions, respectively. When each vertex has unit budget (i.e. can establish link to just one vertex), the diameter of any equilibrium graph in either version is Theta(1). We give examples of equilibrium graphs in the MAX version, such that all vertices have positive budgets and yet the diameter is Omega(sqrt(log n)). This interesting (and perhaps counter-intuitive) result shows that increasing the budgets may increase the diameter of equilibrium graphs and hence deteriorate the network structure. Then we prove that every equilibrium graph in the SUM version has diameter 2^O(sqrt(log n)). Finally, we show that if the budget of each player is at least k, then every equilibrium graph in the SUM version is k-connected or has diameter smaller than 4.Comment: 28 pages, 3 figures, preliminary version appeared in SPAA'1

Mass conserved elementary kinetics is sufficient for the existence of a non-equilibrium steady state concentration

Living systems are forced away from thermodynamic equilibrium by exchange of mass and energy with their environment. In order to model a biochemical reaction network in a non-equilibrium state one requires a mathematical formulation to mimic this forcing. We provide a general formulation to force an arbitrary large kinetic model in a manner that is still consistent with the existence of a non-equilibrium steady state. We can guarantee the existence of a non-equilibrium steady state assuming only two conditions; that every reaction is mass balanced and that continuous kinetic reaction rate laws never lead to a negative molecule concentration. These conditions can be verified in polynomial time and are flexible enough to permit one to force a system away from equilibrium. In an expository biochemical example we show how a reversible, mass balanced perpetual reaction, with thermodynamically infeasible kinetic parameters, can be used to perpetually force a kinetic model of anaerobic glycolysis in a manner consistent with the existence of a steady state. Easily testable existence conditions are foundational for efforts to reliably compute non-equilibrium steady states in genome-scale biochemical kinetic models.Comment: 11 pages, 2 figures (v2 is now placed in proper context of the excellent 1962 paper by James Wei entitled "Axiomatic treatment of chemical reaction systems". In addition, section 4, on "Utility of steady state existence theorem" has been expanded.

Kinetic Inductance of Josephson Junction Arrays: Dynamic and Equilibrium Calculations

We show analytically that the inverse kinetic inductance $L^{-1}$ of an overdamped junction array at low frequencies is proportional to the admittance of an inhomogeneous equivalent impedance network. The $ij^{th}$ bond in this equivalent network has an inverse inductance $J_{ij}\cos(\theta_i^0-\theta_j^0-A_{ij})$, where $J_{ij}$ is the Josephson coupling energy of the $ij^{th}$ bond, $\theta_i^0$ is the ground-state phase of the grain $i$, and $A_{ij}$ is the usual magnetic phase factor. We use this theorem to calculate $L^{-1}$ for square arrays as large as $180\times 180$. The calculated $L^{-1}$ is in very good agreement with the low-temperature limit of the helicity modulus $\gamma$ calculated by conventional equilibrium Monte Carlo techniques. However, the finite temperature structure of $\gamma$, as a function of magnetic field, is \underline{sharper} than the zero-temperature $L^{-1}$, which shows surprisingly weak structure. In triangular arrays, the equilibrium calculation of $\gamma$ yields a series of peaks at frustrations $f = \frac{1}{2}(1-1/N)$, where $N$ is an integer $\geq 2$, consistent with experiment.Comment: 14 pages + 6 postscript figures, 3.0 REVTe

An Improved Combinatorial Polynomial Algorithm for the Linear Arrow-Debreu Market

We present an improved combinatorial algorithm for the computation of equilibrium prices in the linear Arrow-Debreu model. For a market with $n$ agents and integral utilities bounded by $U$, the algorithm runs in $O(n^7 \log^3 (nU))$ time. This improves upon the previously best algorithm of Ye by a factor of \tOmega(n). The algorithm refines the algorithm described by Duan and Mehlhorn and improves it by a factor of \tOmega(n^3). The improvement comes from a better understanding of the iterative price adjustment process, the improved balanced flow computation for nondegenerate instances, and a novel perturbation technique for achieving nondegeneracy.Comment: to appear in SODA 201