Non-Cooperative Cost Sharing Games via Subsidies

We consider a cost sharing system where users are selfish and act according to their own interest. There is a set of facilities and each facility provides services to a subset of the users. Each user is interested in purchasing a service, and will buy it from the facility offering it at the lowest cost. The overall system performance is defined to be the total cost of the facilities chosen by the users. A central authority can encourage the purchase of services by offering subsidies that reduce their price, in order to improve the system performance. The subsidies are financed by taxes collected from the users. Specifically, we investigate a non-cooperative game, where users join the system, and act according to their best response. We model the system as an instance of a set cover game, where each element is interested in selecting a cover minimizing its payment. The subsidies are updated dynamically, following the selfish moves of the elements and the taxes collected due to their pa...

• Type: Journal
• Year: 2010
• Where: MST
• Authors: Niv Buchbinder, Liane Lewin-Eytan, Joseph Naor, Ariel Orda
• Keywords: Hardware, Model, MST 2010, Payments, Subsidy Mechanism