Mechanism design for decentralized online machine scheduling

Traditional optimization models assume a central decision maker who optimizes a global system performance measure. However, problem data is often distributed among several agents, and agents make autonomous decisions. This gives incentives for strategic behavior of agents, possibly leading to sub-optimal system performance. Furthermore, in dynamic environments, machines are locally dispersed and administratively independent. Examples are found both in business and engineering applications. We investigate such issues for a parallel machine scheduling model where jobs arrive online over time. Instead of centrally assigning jobs to machines, each machine implements a local sequencing rule and jobs decide for machines themselves. In this context, we introduce the concept of a myopic best response equilibrium, a concept weaker than the classical dominant strategy equilibrium, but appropriate for online problems. Our main result is a polynomial time, online mechanism that -assuming rational behavior of jobs- results in an equilibrium schedule that is 3.281-competitive with respect to the maximal social welfare. This is only slightly worse than state-of-the-art algorithms with central coordination.