Mechanism design for resource allocation with applications to centralized multi-commodity routing

TL;DR

This paper develops strategy-proof mechanisms for resource allocation problems where individuals privately hold resources, focusing on max-min and Pareto efficiency, with applications to network routing.

Contribution

It introduces a novel reduction technique that transforms optimal algorithms into strategy-proof mechanisms without inspecting input details, applicable to multi-commodity routing.

Findings

Mechanisms achieve max-min and Pareto efficiency.

Reductions do not require input inspection, only oracle queries.

Applied to network route allocation with successful results.

Abstract

We formulate and study the algorithmic mechanism design problem for a general class of resource allocation settings, where the center redistributes the private resources brought by individuals. Money transfer is forbidden. Distinct from the standard literature, which assumes the amount of resources brought by an individual to be public information, we consider this amount as an agent's private, possibly multi-dimensional type. Our goal is to design truthful mechanisms that achieve two objectives: max-min and Pareto efficiency. For each objective, we provide a reduction that converts any optimal algorithm into a strategy-proof mechanism that achieves the same objective. Our reductions do not inspect the input algorithms but only query these algorithms as oracles. Applying the reductions, we produce strategy-proof mechanisms in a non-trivial application: network route allocation. Our models and result in the application are valuable on their own rights.