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Price of Anarchy in Sequencing Situations and the Impossibility to Coordinate

Author

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  • Herbert Hamers
  • Flip Klijn
  • Marco Slikker

Abstract

Scheduling jobs of decentralized decision makers that are in competition will usually lead to cost inefficiencies. This cost inefficiency is studied using the Price of Anarchy (PoA), i.e., the ratio between the worst Nash equilibrium cost and the cost attained at the centralized optimum. First, we provide a tight upperbound for the PoA that depends on the number of machines involved. Second, we show that it is impossible to design a scheduled-based coordinating mechanism in which a Nash equilibrium enforces the centralized or first best optimum. Finally, by simulations we illustrate that on average the PoA is relatively small with respect to the established tight upperbound.

Suggested Citation

  • Herbert Hamers & Flip Klijn & Marco Slikker, 2013. "Price of Anarchy in Sequencing Situations and the Impossibility to Coordinate," Working Papers 709, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:709
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    sequencing situations; outsourcing; first best solution; game theory; price of anarchy; coordinating mechanism;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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