The Pareto Frontier of Inefficiency in Mechanism Design

Aris Filos-Ratsikas, Yiannis Giannakopoulos, Philip Lazos

Research output: Contribution to journalArticlepeer-review

Abstract

We study the trade-off between the price of anarchy (PoA) and the price of stability (PoS) in mechanism design in the prototypical problem of unrelated machine scheduling. We give bounds on the space of feasible mechanisms with respect to these metrics and observe that two fundamental mechanisms, namely the first price (FP) and the second price (SP), lie on the two opposite extrema of this boundary. Furthermore, for the natural class of anonymous task-independent mechanisms, we completely characterize the PoA/PoS Pareto frontier; we design a class of optimal mechanisms SPα that lie exactly on this frontier. In particular, these mechanisms range smoothly with respect to parameter α≥1 across the frontier, between the first price (SP1) and second price (SP∞) mechanisms. En route to these results, we also provide a definitive answer to an important question related to the scheduling problem, namely whether nontruthful mechanisms can provide better makespan guarantees in the equilibrium compared with truthful ones. We answer this question in the negative by proving that the price of anarchy of all scheduling mechanisms is at least n, where n is the number of machines.
Original languageEnglish
Pages (from-to)923-944
Number of pages22
JournalMathematics of Operations Research
Volume47
Issue number2
Early online date10 Nov 2021
DOIs
Publication statusPublished - 1 May 2022

Keywords

  • Primary: 91B26, 91A68
  • secondary: 91A80, 90B35
  • mechanism design
  • scheduling unrelated machines
  • makespan minimization
  • price of anarchy
  • price of stability
  • Pareto frontier

Fingerprint

Dive into the research topics of 'The Pareto Frontier of Inefficiency in Mechanism Design'. Together they form a unique fingerprint.

Cite this