Distributed Resource Management with Monetary Incentives

Modern communication networks handle millions of applications simultaneously, and mechanisms of resource sharing, most prominently sharing of data transmission bandwidth and processing power, between competing jobs have been considered in computer science since its beginning. Classical mechanisms, however, balance claims of cooperating users that do not try to manipulate the system to their advantage. Due to their cost of installation, information technology infrastructure has to be used by clients with no joint interest: by individual users and accross borders of companies. With resources available only in a limited quantity, allocation conflicts do arise. It is natural to apply the classical remedy for conflict resolution and install a market for the system’s resources. This thesis proposes market mechanisms for resource allocation in distributed computer systems. We define a new budget-balanced pricing scheme for combinatorial exchanges that allows matching of bids of autonomous buyers and sellers. We suggets a new bid synchronization rule and prove that it performs superior to periodic and random bid clearing. We give an application of a combinatorial exchange to unicast bandwidth allocation. We demonstrate by a simulation that, for a large part of the parameter space, auctioning bandwidth performs superior to fixed price bandwidth sale, while not requiring prior information on the distribution of bids. The situation for unicast cost sharing is more complicated. After proving that the classical equilibrium mechanism of Kelly can’t looses much efficiency if applied to group communication, we present a generalization of Feigenbaum’s adoption of marginal cost pricing to publish/subscribe settings. We also develop an algorithm for efficient distributed price computation.