Price of Anarchy in a Double-Sided Critical Distribution System

TL;DR

This paper investigates the efficiency loss, measured as Price of Anarchy, in a hybrid market system called Crisdis that combines fair allocation with market trading, especially under government intervention scenarios.

Contribution

It introduces a new PoA measure for the Crisdis system and empirically analyzes how government intervention affects its efficiency.

Findings

PoA decreases in the Crisdis system with governmental interventions

Crisdis balances fair allocation and market efficiency

Empirical results highlight differences from free-market dynamics

Abstract

Measures of allocation optimality differ significantly when distributing standard tradable goods in peaceful times and scarce resources in crises. While realistic markets offer asymptotic efficiency, they may not necessarily guarantee fair allocation desirable when distributing the critical resources. To achieve fairness, mechanisms often rely on a central authority, which may act inefficiently in times of need when swiftness and good organization are crucial. In this work, we study a hybrid trading system called Crisdis, introduced by Jedli\v{c}kov\'{a} et al., which combines fair allocation of buying rights with a market - leveraging the best of both worlds. A frustration of a buyer in Crisdis is defined as a difference between the amount of goods they are entitled to according to the assigned buying rights and the amount of goods they are able to acquire by trading. We define a Price of Anarchy (PoA) in this system as a conceptual analogue of the original definition in the context of frustration. Our main contribution is a study of PoA in realistic complex double-sided market mechanisms for Crisdis. The performed empirical analysis suggests that in contrast to market free of governmental interventions, the PoA in our system decreases.