Price of Fairness on Networked Auctions
Author
Source
Journal of Applied Mathematics
Issue
Vol. 2014, Issue 2014 (31 Dec. 2014), pp.1-7, 7 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2014-07-16
Country of Publication
Egypt
No. of Pages
7
Main Subjects
Abstract EN
We consider an auction design problem under network flow constraints.
We focus on pricing mechanisms that provide fair solutions, where fairness is defined in absolute and relative terms.
The absolute fairness is equivalent to “no individual losses” assumption.
The relative fairness can be verbalized as follows: no agent can be treated worse than any other in similar circumstances.
Ensuring the fairness conditions makes only part of the social welfare available in the auction to be distributed on pure market rules.
The rest of welfare must be distributed without market rules and constitutes the so-called price of fairness.
We prove that there exists the minimum of price of fairness and that it is achieved when uniform unconstrained market price is used as the base price.
The price of fairness takes into account costs of forced offers and compensations for lost profits.
The final payments can be different than locational marginal pricing.
That means that the widely applied locational marginal pricing mechanism does not in general minimize the price of fairness.
American Psychological Association (APA)
Kaleta, Mariusz. 2014. Price of Fairness on Networked Auctions. Journal of Applied Mathematics،Vol. 2014, no. 2014, pp.1-7.
https://search.emarefa.net/detail/BIM-504119
Modern Language Association (MLA)
Kaleta, Mariusz. Price of Fairness on Networked Auctions. Journal of Applied Mathematics No. 2014 (2014), pp.1-7.
https://search.emarefa.net/detail/BIM-504119
American Medical Association (AMA)
Kaleta, Mariusz. Price of Fairness on Networked Auctions. Journal of Applied Mathematics. 2014. Vol. 2014, no. 2014, pp.1-7.
https://search.emarefa.net/detail/BIM-504119
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-504119