Game Theoretic Problems in Network Economics and Mechanism Design Solutions

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 significan

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Y. Narahari · Dinesh Garg · Ramasuri Narayanam Hastagiri Prakash

Game Theoretic Problems in Network Economics and Mechanism Design Solutions

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Y. Narahari Indian Institute of Science Department of Computer Science & Automation Bangalore-560012 India [email protected]

Ramasuri Narayanam Indian Institute of Science Department of Computer Science & Automation Bangalore-560012 India [email protected]

Dinesh Garg IBM India Research Lab Embassy Golf Links Business Park Bangalore-560071 India [email protected]

Hastagiri Prakash Indian Institute of Science Department of Computer Science & Automation Bangalore-560012 India [email protected]

AI&KP ISSN: 1610-3947 ISBN: 978-1-84800-937-0 DOI: 10.1007/978-1-84800-938-7

e-ISBN: 978-1-84800-938-7

British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Control Number: 2008941706 c Springer-Verlag London Limited 2009  Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms of licences issued by the Copyright Licensing Agency. Enquiries concerning reproduction outside those terms should be sent to the publishers. The use of registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant laws and regulations and therefore free for general use. The publisher makes no representation, express or implied, with regard to the accuracy of the information contained in this book and cannot accept any legal responsibility or liability for any errors or omissions that may be made. Printed on acid-free paper Springer Science+Business Media springer.com

Dedicated to

Our Beloved Parents

for giving us this wonderful life, for teaching us the fundamentals of the game of life, and for continuously inspiring us in this life through their exemplary mechanisms

Yadati Narahari Dinesh Garg Ramasuri Narayanam Hastagiri Prakash

Preface

The project of writing this monograph was conceived in August 2006. It is a matter 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 magnificent temple and an eternal source of inspiration, with a splendid ambiance for research. Studying the rational behavior of entities interacting with each other in organized 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. Specif