Beyond moulin mechanisms

The only known general technique for designing truthful, approximatelybudget-balanced cost-sharing mechanisms is due to Moulin. While Moulin mechanisms have been successfully designed for a widerange of applications, recent negative results show that for manyfundamental cost-sharing problems, Moulin mechanisms inevitably sufferfrom poor budget-balance, poor economic efficiency, or both. We propose acyclic mechanisms, a new framework for designingtruthful, approximately budget-balanced cost-sharing mechanisms. Acyclic mechanisms strictly generalize Moulin mechanisms andoffer three important advantages. First, it is easier to design acyclic mechanisms than Moulinmechanisms: many classical primal-dual algorithms naturallyinduce a non-Moulin acyclic mechanism with good performanceguarantees. Second, for several important classes of cost-sharing problems, acyclicmechanisms have exponentially better budget-balance and economicefficiency 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. Copyright 2007 ACM.