Mediated Equilibria in Load-Balancing Games

Mediators are third parties to whom the players in a game can delegate the task of choosing a strategy; a mediator forms a mediated equilibrium if delegating is a best response for all players. Mediated equilibria have more power to achieve outcomes with high social welfare than Nash or correlated equilibria, but less power than a fully centralized authority. Here we begin the study of the power of mediation by using the mediation analogue of the price of stability—the ratio of the social cost of the best mediated equilibrium bme to that of the socially optimal outcome opt. We focus on load-balancing games with social cost measured by weighted average latency. Even in this restricted class of games, bme can range from as good as opt to no better than the best correlated equilibrium. In unweighted games bme achieves opt; the weighted case is more subtle. Our main results are (1) that the worst-case ratio bme/opt is at least (1 + √

• Type: Conference
• Year: 2009
• Where: WINE
• Authors: Joshua R. Davis, David Liben-Nowell, Alexa Sharp, Tom Wexler
• Keywords: Economy, Mediated Equilibrium, Optimal Outcome Opt, Social Cost, WINE 2009