We study path auction games in which multiple edges may be owned by the same agent in this paper. The edge costs and the set of edges owned by the same agent are privately known to the owner of the edge. We show that in this setting, given the assumption the losing agent always has 0 payoff, there is no individual rational strategyproof mechanism in which only edge costs are reported. If the agents are asked to report costs as well as ownership, we show that there is no Pareto efficient mechanism that is false-name proof. auction in this model. We show that, in the special case of parallel-path graphs, there is always a pure-strategy ɛ-Nash equilibrium in bids. We show that this result does not extend to general graphs: we construct a graph in which there is no such ɛ-Nash equilibrium.

Abstract. We study the problem of hiring a team of selfish agents to perform a task. Each agent is assumed to own one or more elements of a set system, and the auctioneer is trying to purchase a feasible solution by conducting an auction. Our goal is to design auctions that are truthful and false-name-proof, meaning that it is in the agents ’ best interest to reveal ownership of all elements (which may not be known to the auctioneer a priori) as well as their true incurred costs. We first propose and analyze a false-name-proof mechanism for the special cases where each agent owns only one element in reality. We prove that its frugality ratio is bounded by n2 n, which nearly matches a lower bound of Ω(2 n) for all false-name-proof mechanisms in this scenario. We then propose a second mechanism. It requires the auctioneer to choose a reserve cost a priori, and thus does not always purchase a solution. In return, it is false-name-proof even when agents own multiple elements. We experimentally evaluate the payment (as well as social surplus) of the second mechanism through simulation. 1

When Disruption Tolerant Network (DTN) is used in commercial environments, incentive mechanism should be employed to encourage cooperation among selfish mobile users. Key challenges in the design of an incentive scheme for DTN are that disconnections among nodes are the norm rather than exception and network topology is time varying. Thus, it is difficult to detect selfish actions that can be launched by mobile users or to pre-determine the routing path to be used. In this paper, we propose MobiCent, a credit-based incentive system for DTN. While MobiCent allows the underlying routing protocol to discover the most efficient paths, it is also incentive compatible. Therefore, using MobiCent, rational nodes will not purposely waste transfer opportunity or cheat by creating non-existing contacts to increase their rewards. MobiCent also provides different payment mechanisms to cater to client that wants to minimize either payment or data delivery delay.

Abstract—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. I.

Abstract. We study the frugality ratio of truthful mechanisms in path auctions, which measures the extent to which truthful mechanisms “overpay” compared to non-truthful mechanisms. In particular we consider the fundamental case that the graph is composed of two node-disjoint s-t-paths of length s1 and s2 respectively, and prove an optimal √ s1s2 lower bound (an improvement over � s1s2/2). This implies that the √-mechanism of Karlin et al. for path auctions is 2-competitive (an improvement over 2 √ 2), and is optimal if the graph is a series-parallel network. Moreover, our results extend to universally truthful randomized mechanisms as well. 1

Abstract. We study game-theoretic mechanisms for routing in ad-hoc networks. Game-theoretic mechanisms capture the non-cooperative and selfish behavior of nodes in a resource-constrained environment. There have been some recent proposals to use incentive-based mechanisms (in particular, VCG) for routing in wireless ad-hoc networks, and some frugality bounds are known when the connectivity graph is essentially complete. We show frugality bounds for random geometric graphs, a wellknown model for ad-hoc wireless connectivity. Our main result demonstrates that VCG-based routing in ad-hoc networks exhibits small frugality ratio (i.e., overpayment) with high probability. In addition, we study a more realistic generalization where sets of agents can form communities to maximize total profit. We also analyze the performance of VCG under such a community model and show similar bounds. While some recent truthful protocols for the traditional (individual) agent model have improved upon the frugality of VCG by selecting paths to minimize not only the cost but the overpayment, we show that extending such protocols to the community model requires solving NP-complete problems which are provably hard to approximate. 1

Abstract. Most of the recent works on algorithmic mechanism design exploit the solution concept of dominant strategy equilibria. Such work designs a proper payment scheme so that selfish agents maximize their utility by truthfully revealing their types. It has been pointed out that these truthful mechanisms, the famous among them being the VCG mechanisms, often incur high payments and fruglity ratios. In this work, we exploit the solution concept of Nash implementation to overcome this problem. Our mechanisms induce a set of Nash equilibria so that selfish agents have incentive to act based on a Nash equilibrium. We prove that our mechanisms enjoy substantial advantages over the truthful mechanisms in terms of payment and frugality. 1

In this paper, we study path auction games in which multiple edges may be owned by the same agent. The edge costs and the set of edges owned by the same agent are privately known to the owner of the edges. In this setting, we show that, assuming that edges not on the winning path always get 0 payment, there is no individually rational, strategyproof mechanism in which only edge costs are reported. If the agents are asked to report costs as well as identity information, we show that there is no Pareto efficient mechanism that is false-name proof. We then study a first-price path auction in this model. We show that, in the special case of parallel-path graphs, there is always a Pareto efficient pure strategy ɛ-Nash equilibrium in bids. However, this result does not extend to general graphs: we construct a graph in which there is no Pareto efficient pure strategy ɛ-Nash equilibrium. Key words: Distributed System, Theory of Computation, Game Theory

hasComponent PortfolioOptimizer hasComponent Today’s development and provision of commercially used Web services has shifted from providing static and predefined functionality to highly configurable services that can be dynamically combined by customers. This new form of composed services called service mashups integrate functionality of multiple sub-services from decentralized providers. Consequently this leads to a high configuration complexity and presents new challenges in the field of planning and pricing of service offerings such as validation of service configurations as well as price determination. Facing these challenges this paper presents an ontology framework for describing technical as well as economic interdependencies between services and shows how planing and pricing algorithms for dynamic Web scenarios can be implemented. As proof of concept we present the implementation of a Service Mashup Planner and show how this tool can be used to construct complex services considering technical as well as economic service aspects. 1

These lecture notes cover two lectures from EECS 510, Algorithmic Mechanism Design, offered at Northwestern University in the Spring 2008 term. They cover the topic of frugality in mechanism design. Prerequisites for reading these lecture notes are basic understanding of algorithms and complexity as well as elementary calculus and probability theory. I will also assume that the reader has access to Lectures on Optimal Mechanism Design, course notes from the 2005 Fall term of Stanford course CS364B, Topics in Algorithmic Game Theory. Thanks to the students of EECS510. Comments are welcome. 1