Applied Mechanism Design for Social Good

In lecture 17, we discussed spectrum allocation. In the US, the FCC has used various methods to allocate spectrum, a finite resource that has now been fully allocated. That means that there is no spectrum left for newer technologies like mobile phones, so the FCC must reallocate. Currently, the FCC is implementing a mechanism called an incentive auction, which involves a reverse auction and a forward auction. In the reverse auction, television stations, an older technology, sell their spectrum to the FCC in an auction based on a descending clock. The remaining stations must then be repacked into a narrower band of spectrum, so the freed spectrum can then be sold to newer technologies in the forward auction. The station repacking problem is NP-Complete, but there exists a solution that is efficient enough in practice. In lecture 18, we discussed notions of fairness and fair division of goods. We can define fairness in terms of proportionality, envy-freeness, and equitability, and analyze the cost of fairness. Dividing divisible goods can be modeled with various cake-cutting algorithms. Dividing indivisible goods is more difficult. A simple round-robin allocation is envy-free up to one good, but a true envy-free allocation only exists with high probability when the number of goods is much larger than the number of agents.