/pdf/the-theory-of-industrial-organization-19bejph0ej.pdf

The Theory of Industrial Organization

We consider the problem of routing traffic to optimize the performance of a congested network. We are given a network, a rate of traffic between each pair of nodes, and a latency function for each edge specifying the time needed to traverse the edge given its congestion; the objective is to route traffic such that the sum of all travel times---the total latency---is minimized.In many settings, it may be expensive or impossible to regulate network traffic so as to implement an optimal assignment of routes. In the absence of regulation by some central authority, we assume that each network user routes its traffic on the minimum-latency path available to it, given the network congestion caused by the other users. In general such a "selfishly motivated" assignment of traffic to paths will not minimize the total latency; hence, this lack of regulation carries the cost of decreased network performance.In this article, we quantify the degradation in network performance due to unregulated traffic. We prove that if the latency of each edge is a linear function of its congestion, then the total latency of the routes chosen by selfish network users is at most 4/3 times the minimum possible total latency (subject to the condition that all traffic must be routed). We also consider the more general setting in which edge latency functions are assumed only to be continuous and nondecreasing in the edge congestion. Here, the total latency of the routes chosen by unregulated selfish network users may be arbitrarily larger than the minimum possible total latency; however, we prove that it is no more than the total latency incurred by optimally routing twice as much traffic.

/pdf/how-bad-is-selfish-routing-g644vu88rg.pdf

How bad is selfish routing

Information, trade and common knowledge

A major challenge in the operation of wireless communications systems is the efficient use of radio resources. One important component of radio resource management is power control, which has been studied extensively in the context of voice communications. With the increasing demand for wireless data services, it is necessary to establish power control algorithms for information sources other than voice. We present a power control solution for wireless data in the analytical setting of a game theoretic framework. In this context, the quality of service (QoS) a wireless terminal receives is referred to as the utility and distributed power control is a noncooperative power control game where users maximize their utility. The outcome of the game results in a Nash (1951) equilibrium that is inefficient. We introduce pricing of transmit powers in order to obtain Pareto improvement of the noncooperative power control game, i.e., to obtain improvements in user utilities relative to the case with no pricing. Specifically, we consider a pricing function that is a linear function of the transmit power. The simplicity of the pricing function allows a distributed implementation where the price can be broadcast by the base station to all the terminals. We see that pricing is especially helpful in a heavily loaded system.

/pdf/efficient-power-control-via-pricing-in-wireless-data-34gk0jwxel.pdf

Efficient power control via pricing in wireless data networks

The History of Economic Analysis

We derive the existence of a Walras equilibrium directly from Nash's theorem on noncooperative games. No price player is involved, nor are generalized games. Instead we use a variant of the Shapley-Shubik trading-post game.

From Nash to Walras via Shapley-Shubik

: ;Contents: A strategic model of exchange and production; The Existence of noncooperative equilibrium points; Limit equilibrium points and competitive equilibria; Discussion and further problems--(The role of credit, Capital goods, The trading of shares, A comment on existence of oligopolistic equilibria, A variation of the model)

A Closed Economic System with Production and Exchange Modelled as a Game of Strategy

We show that intermediate goods can be sourced to firms on the "outside" (that do not compete in the final product market), even when there are no economies of scale or cost advantages for these firms. What drives the phenomenon is that "inside" firms, by accepting such orders, incur the disadvantage of becoming Stackelberg followers in the ensuing competition to sell the final product. Thus they have incentive to quote high provider prices to ward off future competitors, driving the latter to source outside.

Outsourcing Induced by Strategic Competition

Consider a contest for a prize in which each player knows his own ability, but may or may not know those of his rivals (the complete or incomplete information regimes). Our main result is that, if the value of the prize is high, more e¤ort and output are engendered under incomplete information; whereas, if the value is low, that distinction goes to complete information. We also examine strategic behavior of a "contest manager" who is privy to information about the abilities of all the players. It turns out that, in order to inspire performance, it is often better for him neither to reveal all nor to conceal all, but to follow a middle path of partial revelation.

/pdf/on-the-role-of-information-in-contests-45vpamb49n.pdf

On the Role of Information in Contests

We prove the existence of monetary equilibrium in a finite horizon economy with production. We also show that if agents expect the monetary authority to significantly decrease the supply of bank money available for short term loans in the future, then the economy will fall into a liquidity trap today.

Pradeep Dubey

Papers

From Nash to Walras via Shapley-Shubik

A Closed Economic System with Production and Exchange Modelled as a Game of Strategy

Outsourcing Induced by Strategic Competition

On the Role of Information in Contests

Money and Production, and Liquidity Trap