A comparative analysis of information acquisition mechanisms for discrete resource allocation

Abstract

Discrete resource allocation problems (RAPs) deal with making decisions that result in an optimal deployment of indivisible scarce resources among a group of agents so as to achieve the maximum aggregate utility. One prerequisite for solving the discrete RAP is that the decision maker be cognizant of the individual utility functions for the agents involved. When an agent's preference information is not available, the decision maker needs to gather such information through an inquiry process. The information acquisition process entails its own costs such as communication costs and computation costs. In this paper, three different information inference mechanisms merging, ranking, and entropy - are proposed and compared for the information acquisition process in the discrete RAP. It is found that the merging mechanism results in the least computation costs for the decision maker while the entropy mechanism incurs the least communication costs.