Game Theoretic Problems in Network Economics and Mechanism Design Solutions

The project of writing this monograph was conceived in August 2006. It is a m- ter of delight and satisfaction that this monograph would be published during the centenary year (May 27, 2008 – May 26, 2009) of our dear alma mater, the Indian Institute of Science, which is truly a magni cent temple and an eternal source of inspiration, with a splendid ambiance for research. Studying the rational behavior of entities interacting with each other in or- nized or ad-hoc marketplaces has been the bread and butter of our research group here at the Electronic Commerce Laboratory,Department of Computer Science and Automation, Indian Institute of Science. Speci cally, the application of game th- retic modeling and mechanism design principles to the area of network economics was an area of special interest to the authors. In fact, the dissertations of the s- ond, third, and fourth authors (Dinesh Garg, Ramasuri Narayanam, and Hastagiri Prakash) were all in this area. Dinesh Garg’s Doctoral Thesis, which later won the Best Dissertation Award at the Department of Computer Science and Automation, Indian Institute of Science for the academic year 2006-07, included an interesting chapter on applying the brilliant work of Roger Myerson (Nobel laureate in E- nomic Sciences in 2007) to the topical problem of sponsored search auctions on the web. Ramasuri’s Master’s work applied mechanism design to develop robust broadcastprotocolsin wireless adhoc networkswhile Hastagiri’s Master’s work - veloped resource allocation mechanisms for computational grids.

With the advent of the Internet and other modern information and communication technologies, a magnificent opportunity has opened up for introducing new, innovative models of commerce, markets, and business. Creating these innovations calls for significant interdisciplinary interaction among researchers in computer science, communication networks, operations research, economics, mathematics, sociology, and management science. In the emerging era of new problems and challenges, one particular tool that has found widespread applications is mechanism design.

The focus of this book is to explore game theoretic modeling and mechanism design for problem solving in Internet and network economics.  It provides a sound foundation of relevant concepts and theory, to help apply mechanism design to problem solving in a rigorous way.