Allocation in Networks
A comprehensive overview of networks and economic design, presenting models and results drawn from economics, operations research, and computer science; with examples and exercises.
This book explores networks and economic design, focusing on the role played by allocation rules (revenue and cost-sharing schemes) in creating and sustaining efficient network solutions. It takes a normative approach, seeking economically efficient network solutions sustained by distributional fairness, and considers how different ways of allocating liability affect incentives for network usage and development. The text presents an up-to-date overview of models and results currently scattered over several strands of literature, drawing on economics, operations research, and computer science.
The book's analysis of allocation problems includes such classic models from combinatorial optimization as the minimum cost spanning tree and the traveling salesman problem. It examines the planner's ability to design mechanisms that will implement efficient network structures, both in large decentralized networks and when there is user-agent information asymmetry. Offering systematic theoretical analyses of various compelling allocation rules in cases of fixed network structures as well as discussions of network design problems, the book covers such topics as tree-structured distribution systems, routing games, organizational hierarchies, the “price of anarchy,” mechanism design, and efficient implementation. Appropriate as a reference for practitioners in network regulation and the network industry or as a text for graduate students, the book offers numerous illustrative examples and end-of-chapter exercises that highlight the concepts and methods presented.
Jens Leth Hougaard has written a masterpiece on allocation in networks. This lucidly written book successfully and smoothly integrates a rich set of contributions from operations research, economics, and computer science. Its insightful and deep discussions are sure to inspire many generations of scholars for a long time to come.
P. Jean-Jacques Herings, Professor of Economics, Maastricht University
This very readable book brings together tools from many subareas of game theory and operations research to offer a comprehensive discussion of cost and profit allocation in networks. An excellent selection of exercises makes it easy to use this book as a basis for a graduate course.
Edith Elkind, Professor of Computing Science, University of Oxford
A delightful interdisciplinary perspective on allocation problems in networks: clear, concise, and full of useful examples. Starting from the basics, Jens Hougaard quickly and ably leads the reader through many recent advances. For researchers and students who want to learn about this important topic, this book is timely and indispensable.
Jay Sethuraman, Professor of Industrial Engineering and Operations Research, Columbia University