Capacity-Aware Mechanisms for Service Overlay Design

We study mechanism designs for resource management in service overlay, where services are provided by strategic agents. Usually, resources in distributed systems are limited. However, the current mechanism design does not take the capacity of agents into consideration. Traditionally, the Vickrey- Clarke-Groves (VCG) mechanism has been the only method to design protocols so that each strategic agent will follow the protocols for its own interest to maximize its benefit. We show that the VCG mechanism is not truthful anymore when the capacity of agents is limited. Thus, we have designed, based on non-uniform prices, a new capacity-aware mechanism which subsidizes the service agents so that each agent maximizes its profit if it truthfully reports its cost. Mechanisms for two widely used pricing models are designed and evaluated.