Beyond Moulin Mechanisms

The only known general technique for designing truthful, approximately budget-balanced cost-sharing mechanisms is due to Moulin. While Moulin mechanisms have been successfully designed for a wide range of applications, recent negative results show that for many fundamental cost-sharing problems, Moulin mechanisms inevitably stiffer from poor budget-balance, poor economic efficiency, or both. We propose acyclic mechanisms, a new framework for designing truthful, approximately budget-balanced cost-sharing mechanisms. Acyclic mechanisms strictly generalize Moulin mechanisms and offer three important advantages. First, it is easier to design acyclic mechanisms than Moulin mechanismis: many classical primal-dual algorithms naturally induce a non-Moulin acyclic mechanism with good performance guarantees. Second, for several important classes of cost-sharing problems, acyclic mechanisms have exponentially better budget-balance and economic efficiency than Moulin mechanisms. Finally, while Moulin mechanisms have found application primarily in binary demand games, we extend acyclic mechanisms to general demand games, a multi-parameter setting in which each bidder can be allocated one of several levels of service.