On the tradeoff between privacy and efficiency: A bidding mechanism for scheduling non-commercial services

Services providers, such as public healthcare systems and government agencies, are under tremendous pressure to reduce costs and improve service quality. Scheduling is an important managerial component which has considerable impact on both the costs and quality of services. Service providers need customers’ availability information to improve resource utilization. On the other hand, customers may be of “two minds” about communicating their private information. While communicating certain amount of availability might be necessary in order to obtain preferred schedules, too much communication place a potential cost due to privacy loss. In this paper, we present a bidding-based mechanism which aims at generating high quality schedules and, at the same time, protecting customers’ privacy. We show that, under the proposed bidding procedure, myopic bidding is the dominant strategy for customers. We also evaluate the privacy and efficiency performance of the proposed mechanism through a computational study. Keyword: Non-commercial services, distributed scheduling, privacy, efficiency, iterative bidding, auction