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Competition Yields Efficiency in Load Balancing Games Jonatha Anselmi1

Summary: Competition Yields Efficiency in Load Balancing Games
Jonatha Anselmi1
, Urtzi Ayesta1,2
, Adam Wierman3
BCAM ­ Basque Center for Applied Mathematics, Derio, 48170, Spain
IKERBASQUE, Basque Foundation for Science, Bilbao, 48170, Spain
Computer and Mathematical Sciences, Caltech, Pasadena, CA 91125, USA
We study a nonatomic congestion game with N parallel links, with each link under the control of
a profit maximizing provider. Within this `load balancing game', each provider has the freedom to
set a price, or toll, for access to the link and seeks to maximize its own profit. Within fixed prices,
a Wardrop equilibrium among users is assumed, under which users all choose paths of minimal and
identical effective cost. Within this model we have oligopolistic price competition which, in equilibrium,
gives rise to situations where neither providers nor users have incentives to adjust their prices or routes,
respectively. In this context, we provide new results about the existence and efficiency of oligopolistic
equilibria. Our main theorem shows that, when the number of providers is small, oligopolistic equilibria
can be extremely inefficient; however as the number of providers N grows, the oligopolistic equilibria


Source: Ayesta, Urtzi - Laboratoire d'Analyse et d'Architecture des Systèmes du CNRS


Collections: Engineering