Efficiency Loss in a Network Resource Allocation Game

In this report, we summarize the paper by Ramesh Johari and John Tsitsiklis [1]. This paper considers the problem of distributed resource allocation mechanisms for the Internet. The current Internet is used widely by a heterogenous population of users. Different users place different values on the perceived network performance. Moreover there are some fundamental constraints on the maximum rate each link can support. How can the bandwidth be efficiently allocated to different users in such a setting? To make the problem more concrete, consider the example shown in figure 1 taken from [2].