Combinatorial double-sided auctions for network bandwidth allocation: A budget-balanced and decentralized approach

Telecommunication networks are now an interconnection of competitive operators that need to cooperate to ensure end-to-end delivery of traffic. Inter-domain agreements have to be performed, and pricing is seen as a relevant way to reward intermediate domains for forwarding the traffic of others. In previous works, VickreyClark-Groves (VCG) double-sided auctions have been applied because they provide proper incentives, lead to an efficient use of the network and verify other relevant characteristics. However, it has been highlighted that the resource allocation schemes applying VCG auction are neither budget-balanced nor solvable in a decentralized way. In this paper, we apply combinatorial double-sided auction to allocate the bandwidth resources over nodes. While previous works were using a centralized algorithm, we use here a new pricing rule, leading to a new budget-balanced pricing scheme for which allocations and charges can be computed in a decentralized way. We also analyze the impact of this scheme on the game over declared costs of nodes. Keywords Resource allocation · Inter-domain · Network Management · Game Theory · Auctions