To be or not to be (served)

Abstract

A common modeling assumption in the realm of cost sharing is that players persuade each other to jointly submit false bids if none of the members of such a coalition loses utility and at least one gains. In order to counteract this kind of manipulation, the service provider could employ group-strategyproof (GSP) mechanisms that elicit truthful bids. The basically only general technique for the design of GSP mechanisms is due to Moulin. Unfortunately, it has limitations with regard to budgetbalance (BB) and economic efficiency (EFF). In this work, we introduce a slight modification of GSP that we call CGSP, allowing us to achieve vastly better results concerning BB and EFF. In particular, we give new CGSP mechanisms that we call "egalitarian" due to being inspired by Dutta and Ray's (1989) "egalitarian solution". We achieve 1-BB for arbitrary costs and additionally 2Hn-EFF for the very natural and large class of subadditive costs. Egalitarian mechanisms are also acyclic mechanisms, as introduced by Mehta et al. (2007). Thus far, acyclic was known only to imply weak GSP, yet we show that it is already sufficient for the strictly stronger CGSP. Finally, we present a framework and applications on how to cope with computational complexity. © Springer-Verlag Berlin Heidelberg 2007.