IDEAS home Printed from https://ideas.repec.org/a/spr/grdene/v12y2003i5d10.1023_bgrup.0000003745.98183.8d.html
   My bibliography  Save this article

Nash Equilibrium and Decentralized Negotiation in Auctioning Divisible Resources

Author

Listed:
  • Rajiv T. Maheswaran

    (University of Illinois at Urbana-Champaign)

  • Tamer Başar

    (University of Illinois at Urbana-Champaign)

Abstract

We consider the problem of software agents being used as proxies for the procurement of computational and network resources. Mechanisms such as single-good auctions and combinatorial auctions are not applicable for the management of these services, as assigning an entire resource to a single agent is often undesirable and appropriate bund sizes are difficult to determine. We investigate a divisible auction that is proportionally fair. By introducing the notion of price and demand functions that characterize optimal response functions of the bidders, we are able to prove that this mechanism has a unique Nash equilibrium for an arbitrary number of agents with heterogeneous quasilinear utilities. We also describe decentralized negotiation strategies which, with approrpate relaxation, converge locally to the equilibrium point. Given an agent with a sequence of jobs, we show how our analysis holds for a wide variety of objectives.

Suggested Citation

  • Rajiv T. Maheswaran & Tamer Başar, 2003. "Nash Equilibrium and Decentralized Negotiation in Auctioning Divisible Resources," Group Decision and Negotiation, Springer, vol. 12(5), pages 361-395, September.
    • Handle: RePEc:spr:grdene:v:12:y:2003:i:5:d:10.1023_b:grup.0000003745.98183.8d
    DOI: 10.1023/B:GRUP.0000003745.98183.8d
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1023/B:GRUP.0000003745.98183.8d
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1023/B:GRUP.0000003745.98183.8d?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cheng, John Q & Wellman, Michael P, 1998. "The WALRAS Algorithm: A Convergent Distributed Implementation of General Equilibrium Outcomes," Computational Economics, Springer;Society for Computational Economics, vol. 12(1), pages 1-24, August.
    2. Leon A Petrosyan & Nikolay A Zenkevich, 2016. "Game Theory," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 9824, October.
    3. Wellman, Michael P. & Walsh, William E. & Wurman, Peter R. & MacKie-Mason, Jeffrey K., 2001. "Auction Protocols for Decentralized Scheduling," Games and Economic Behavior, Elsevier, vol. 35(1-2), pages 271-303, April.
    4. Mackie-Mason, J.K. & Varian, H.R., 1993. "Pricing the Internet," Memorandum 1993_020, Oslo University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amin Nezarat & GH Dastghaibifard, 2015. "Efficient Nash Equilibrium Resource Allocation Based on Game Theory Mechanism in Cloud Computing by Using Auction," PLOS ONE, Public Library of Science, vol. 10(10), pages 1-29, October.
    2. Ramesh Johari & John N. Tsitsiklis, 2004. "Efficiency Loss in a Network Resource Allocation Game," Mathematics of Operations Research, INFORMS, vol. 29(3), pages 407-435, August.
    3. Daron Acemoglu & Asuman Ozdaglar, 2007. "Competition and Efficiency in Congested Markets," Mathematics of Operations Research, INFORMS, vol. 32(1), pages 1-31, February.
    4. Ioannis Caragiannis & Alexandros A. Voudouris, 2021. "The Efficiency of Resource Allocation Mechanisms for Budget-Constrained Users," Mathematics of Operations Research, INFORMS, vol. 46(2), pages 503-523, May.
    5. N. A. Korgin & V. O. Korepanov, 2017. "Experimental Gaming Comparison of Resource Allocation Rules in Case of Transferable Utilities," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 19(02), pages 1-11, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. William H. Sandholm, 2005. "Negative Externalities and Evolutionary Implementation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(3), pages 885-915.
    2. Adhau, Sunil & Mittal, M.L. & Mittal, Abhinav, 2013. "A multi-agent system for decentralized multi-project scheduling with resource transfers," International Journal of Production Economics, Elsevier, vol. 146(2), pages 646-661.
    3. Saglam, Ismail, 2016. "An Alternative Characterization for Iterated Kalai-Smorodinsky-Nash Compromise," MPRA Paper 73564, University Library of Munich, Germany.
    4. Paul A. David, 2006. "Economic Policy Analysis and the Internet: Coming to Terms with a Telecommunications Anomaly," Discussion Papers 06-004, Stanford Institute for Economic Policy Research.
    5. Ismail Saglam, 2017. "Iterated Kalai–Smorodinsky–Nash compromise," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 40(1), pages 335-349, November.
    6. Schnizler, Björn & Neumann, Dirk & Veit, Daniel & Napoletano, Mauro & Catalano, Michele & Gallegati, Mauro & Reinicke, Michael & Streitberger, Werner & Eymann, Torsten, 2005. "Environmental analysis for application layer networks," Bayreuth Reports on Information Systems Management 1, University of Bayreuth, Chair of Information Systems Management.
    7. Giovannetti, Emanuele, 2002. "Interconnection, differentiation and bottlenecks in the Internet," Information Economics and Policy, Elsevier, vol. 14(3), pages 385-404, September.
    8. Miglo, Anton & Zenkevich, Nikolay, 2005. "Non-hierarchical signalling: two-stage financing game," MPRA Paper 1264, University Library of Munich, Germany, revised 2006.
    9. Javier Frutos & Guiomar Martín-Herrán, 2015. "Does Flexibility Facilitate Sustainability of Cooperation Over Time? A Case Study from Environmental Economics," Journal of Optimization Theory and Applications, Springer, vol. 165(2), pages 657-677, May.
    10. Agnetis, Alessandro & Chen, Bo & Nicosia, Gaia & Pacifici, Andrea, 2019. "Price of fairness in two-agent single-machine scheduling problems," European Journal of Operational Research, Elsevier, vol. 276(1), pages 79-87.
    11. MacKie-Mason, J.K. & Varian, H.L., 1993. "Some Economists of the Internet," Papers 93-16, Michigan - Center for Research on Economic & Social Theory.
    12. Narine Badasyan & Subhadip Chakrabarti, 2004. "Intra-backbone and Inter-backbone Peering Among Internet Service Providers," Microeconomics 0407006, University Library of Munich, Germany.
    13. Nielsen, Kurt, 2005. "Auctioning Payment Entitlements," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24566, European Association of Agricultural Economists.
    14. William E. Walsh & Michael P. Wellman, 1999. "Efficiency and Equilibrium in Task Allocation Economics with Hierarchical Dependencies," Working Papers 99-07-049, Santa Fe Institute.
    15. Yasushi Masuda & Seungjin Whang, 1999. "Dynamic Pricing for Network Service: Equilibrium and Stability," Management Science, INFORMS, vol. 45(6), pages 857-869, June.
    16. Bernard Hoekman & Carlos Braga, 1997. "Protection and Trade in Services: A Survey," Open Economies Review, Springer, vol. 8(3), pages 285-308, July.
    17. Russo, Antonio, 2011. "Congestion pricing, infrastructure investment and redistribution," MPRA Paper 28932, University Library of Munich, Germany.
    18. William H. Sandholm, 2002. "Evolutionary Implementation and Congestion Pricing," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(3), pages 667-689.
    19. Sokolovska, Olena & Sokolovskyi, Dmytro, 2015. "Tax evasion as a determinant of corruption: a game-theoretical analysis," MPRA Paper 66423, University Library of Munich, Germany, revised 2015.
    20. Allesandro Agnetis & Pitu B. Mirchandani & Dario Pacciarelli & Andrea Pacifici, 2004. "Scheduling Problems with Two Competing Agents," Operations Research, INFORMS, vol. 52(2), pages 229-242, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:grdene:v:12:y:2003:i:5:d:10.1023_b:grup.0000003745.98183.8d. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.