Mechanism Design for Exchanging Resources in Federated Networks

Abstract

This paper introduces a mechanism for pricing and exchanging resources in federated networks of task-processing elements. An operational model is developed to allocate processing, storage and communication resources to computational demands. This model finds an efficient and stable solution to combinatorial routing and allocating resources among networked elements with technical constraints. Using mixed-integer linear programming (MILP) formulation, we find optimal solution to processing tasks, allocating links, storing and delivering data to destination. A trusted auctioneer uses a mechanism to allocate resources to computational tasks and suggests prices for exchanging resources across a federation using minimum number of MILP solutions to a network topology. The proposed mechanism maximizes the collective value for a federation and ensures an expected value for each federate and minimizes the computational cost associated with the operational runs. The auctioneer doesn’t have access to utility functions and private information on resources a priori while assumes a federation with self-centric and rational participants. An application of federated satellite systems is developed with endogenous components such as adaptive bidding and opportunity cost of using resources. Numerical results show that the proposed mechanism improves the collective and expected values in a federation with strategic federates.