Maximizing revenue in symmetric resource allocation systems when user utilities exhibit diminishing returns

Consumers of resources in realistic applications (e.g., web, multimedia) typically derive diminishing-return utilities from the amount of resource they receive. A resource provider who is deriving an equal amount of revenue from each satisfied user (e.g., by online advertising), can maximize the number of users by identifying a satisfaction threshold for each user, i.e., the minimal amount of resource the user requires in order to use the service (rather than drop out). A straightforward approach is to ask users to submit their minimal demands (direct revelation). Unfortunately, self-interested users may try to manipulate the system by submitting untruthful requirements. We propose an incentive-compatible mechanism for maximizing revenue in a resource allocation system where users are ex-ante symmetric (same amount of revenue for any satisfied user) and have diminishing-return utility functions. Users are encouraged by the mechanism to submit their true requirements and the system a...

• Type: Journal
• Year: 2011
• Where: ATAL
• Authors: Roie Zivan, Miroslav Dudík, Praveen Paruchuri, Katia P. Sycara
• Keywords: ATAL 2011, Compatible Mechanism, Diminishing Return, Intelligent Agents, True Requirements