Redistribution Mechanism on Networks
This addresses a specific problem in mechanism design for networked resource allocation, representing an incremental advance by adapting redistribution mechanisms to network constraints.
The paper tackles the problem of designing a redistribution mechanism for efficient resource allocation in a network where participants are connected and the resource owner is only linked to some, aiming to incentivize invitations without causing financial loss to the owner. It proposes a novel network-based mechanism that ensures all participants are invited, improves allocation efficiency, and avoids deficits.
Redistribution mechanisms have been proposed for more efficient resource allocation but not for profit. We consider redistribution mechanism design in a setting where participants are connected and the resource owner is only connected to some of them. In this setting, to make the resource allocation more efficient, the resource owner has to inform the others who are not her neighbours, but her neighbours do not want more participants to compete with them. Hence, the goal is to design a redistribution mechanism such that participants are incentivized to invite more participants and the resource owner does not earn or lose much money from the allocation. We first show that existing redistribution mechanisms cannot be directly applied in the network setting and prove the impossibility to achieve efficiency without a deficit. Then we propose a novel network-based redistribution mechanism such that all participants on the network are invited, the allocation is more efficient and the resource owner has no deficit.