Strategic Facility Location with Limited Liars

TL;DR

This paper analyzes Nash and strong equilibria in strategic facility location games with some clients lying about their locations, showing existence and bounds on solution quality depending on the fraction of strategic clients.

Contribution

It establishes existence and bounds for Nash and strong equilibria in strategic facility location games with strategic clients, including tight bounds and special cases.

Findings

Nash equilibrium always exists with a price of stability close to 1.

Nash equilibria are within a factor of (n+2k)/(n-2k) of the optimum.

Strong equilibrium exists on line metrics with cost at most (n+k)/(n-k) times the optimum.

Abstract

We study Nash equilibria in strategic facility location games where clients are located in an arbitrary metric space. Specifically, there are $n$ clients, and the goal is to choose a facility from a set of given locations, so that the total distance from the clients to the facility is as small as possible. While some of the clients are always truthful, $k$ of them are strategic, and will lie about their location if it benefits them. We quantify how the fraction of strategic clients affects the existence and quality of Nash equilibrium and strong equilibrium solutions, and note that even for relatively large $k$, the properties of these solutions can be much better than the results of fully strategyproof mechanisms. For Nash equilibrium, we show that it always exists, and the price of stability is very close to 1. More importantly, we prove that all Nash equilibria are within a factor of at most $\frac{n+2k}{n-2k}$ from the optimum solution, and that this price of anarchy bound is almost tight. While strong equilibrium may not exist for this setting, we prove that it always exists for line metrics, and its cost is at most $\frac{n+k}{n-k}$ times that of optimum.