1. Beyond Routing Games: Network (Formation) Games

2. Network Games (NG) NG model the various ways in which selfish users (i.e., players) strategically interact in using a (either communication, computer, social, etc.) network The Internet routing game is a particular type of network congestion game Other examples of NG: social network games, network design games, network creation games, graphical games, etc. Notice that each of these games is actually a class of games, where any element of the class is an instance of the game

3. A warming-up NG: The ISPs dilemma Two Internet Service Providers (ISP) owning part of a network: ISP1 e ISP2 ISP1 wants to send traffic from s1 to t1 ISP2 wants to send traffic from s2 to t2 s1 s2 t1 t2 C S Long links incur a per-user cost of 1 to the ISP owning the link C, S: peering points Each ISP can use two paths: either passing through C or not Short links incur a negligible per-user cost to the ISP owning the link

4. A (bad) DSE s1 s2 t1 t2 C S C, S: peering points avoid C through C avoid C 2, 25, 1 through C 1, 54, 4 Cost Matrix ISP1 ISP2  PoA is (4+4)/(2+2)=2 Dominant Strategy Equilibrium

5. Network Formation Games (NFG) NFG are NG that aim to capture two competing issues for players when using a network for communication purposes: to minimize the afforded cost to be provided with a high quality of service Two big categories of NFG: Network Design Games (a.k.a. Global Connection Games): Users autonomously design a communication subnetwork embedded in an already existing network with the selfish goal of sharing costs in using it for a point-to-point communication Network Creation Games (a.k.a. Local Connection Games): Users autonomously form ex-novo a network that connects them for reciprocal communication (e.g., downloading files in P2P networks, exchanging messages in social networks, etc.)

6. First case study: Network Design Games (a.k.a. Global Connection Games)

7. Introduction A GCG is a game that models the design of a communication subnetwork embedded in a given network (i.e., a graph) for a point-to-point communication, with the selfish goal of sharing costs while using it Players: pay for the links they personally use benefit from sharing links with other players in the selected subnetwork

8. The model G=(V,E): directed graph, k players c e : non-negative cost of e  E Player i has a source node s i and a sink node t i Strategy for player i: a path P i from s i to t i Let k e denote the load of edge e, i.e., the number of players using e. The cost of P i for player i in S=(P 1,…,P k ) is shared with all the other players using (part of) it, namely: cost i (S) =  c e /k e ePiePi this cost-sharing scheme is called fair or Shapley cost-sharing mechanism

9. The model Given a strategy vector S, the constructed network N(S) is given by the union of all paths P i Then, the social-choice function (i.e., the total cost of the constructed network) is the following : Notice that each user has a favorable effect on the performance of other users (so-called cross monotonicity), as opposed to the congestion model of selfish routing C(S)=  cost i (S) =   c e /k e =  c e ePiePi ii e  N(S)

10. Setting What is a stable network? We use NE as the solution concept How to evaluate the overall quality of a stable network? We compare its cost to that of an optimal (in general, unstable) network Our goal: to bound the efficiency loss resulting from selfishness

11. Bounding the loss of efficiency Remind that a network is optimal or socially efficient if it minimizes the social cost (i.e., it minimizes the social-choice function) We use the PoA to estimate the loss of efficiency we may have in the worst case, as given by the ratio between the cost of a worst stable network and the cost of an optimal network What about the ratio between the cost of a best stable network and the cost of an optimal network?

12. The price of stability (PoS) Definition (Schulz & Moses, 2003) : Given a (single-instance) game G and a social-choice function C which depends on the payoff of all the players, let S be the set of all NE. If the payoff represents a cost (resp., a utility) for a player, let OPT be the outcome of G minimizing (resp., maximizing) C. Then, the Price of Stability (PoS) of G w.r.t. C is: Remark: If the game consists of several instances, then its PoS is the maximum/minimum among the PoS of all the instances, depending on whether the payoff for a player is either a cost or a utility. PoS G (C) =

13. Some remarks PoA and PoS are (for positive s.c.f. C)  1 for minimization problems  1 for maximization problems PoA and PoS are small when they are close to 1 PoS is at least as close to 1 than PoA In a game with a unique NE, PoA=PoS Why to study the PoS? sometimes a nontrivial bound is possible only for PoS PoS quantifies the necessary degradation in quality under the game-theoretic constraint of stability

14. An example 1 1 1 1 3 3 3 2 4 5.5 s1s1 s2s2 t1t1 t2t2

15. An example 1 1 1 1 3 3 3 2 45.5 s1s1 s2s2 t1t1 t2t2 optimal network has cost 12 cost 1 =7 cost 2 =5 is it stable?

16. An example 1 1 1 1 3 3 3 2 45.5 s1s1 s2s2 t1t1 t2t2  PoA  13/12, PoS ≤ 13/12 cost 1 =5 cost 2 =8 is it stable? …yes, and has cost 13! …no!, player 1 can decrease its cost

17. An example 1 1 1 1 3 3 3 2 45.5 s1s1 s2s2 t1t1 t2t2 the social cost is 12.5  PoS = 12.5/12 cost 1 =5 cost 2 =7.5 …a best possible NE: Homework: find a worst possible NE

18. Our concerned issues in GCG Does a stable network always exist? Does the repeated version of the game always converge to a stable network? Can we bound the price of anarchy (PoA)? Can we bound the price of stability (PoS)?

19. Any instance of the global connection game has a pure Nash equilibrium, and best response dynamics always converges. Theorem 1 The PoA in the global connection game with k players is at most k (i.e., every instance of the game has PoA ≤ k), and this is tight (i.e., we can exhibit an instance of the game whose PoA is k). Theorem 2 The PoS in the global connection game with k players is at most H k, the k-th harmonic number (i.e., every instance of the game has PoS ≤ H k ), and this is tight (i.e., we can exhibit an instance of the game whose PoS is H k ) Theorem 3

20. For any finite game, an exact potential function  is a function that maps every strategy vector S to some real value and satisfies the following condition: The potential function method  S=(s 1,…,s k ), s’ i  s i, let S’=(s 1,…,s’ i,…,s k ), then  (S)-  (S’) = cost i (S)-cost i (S’). A game that does possess an exact potential function is called potential game

21. Every potential game has at least one pure Nash equilibrium, namely the strategy vector S that minimizes  (S). Lemma 1 Proof: consider any move by a player i that results in a new strategy vector S’. Since  (S) is minimum, we have:  (S)-  (S’) = cost i (S)-cost i (S’)  0 cost i (S)  cost i (S’) player i cannot decrease its cost, thus S is a NE.

22. In any finite potential game, best response dynamics always converges to a Nash equilibrium Lemma 2 Observation: any state S with the property that  (S) cannot be decreased by changing any single component of S is a NE by the same argument. Furthermore, by definition, improving moves for players decrease the value of the potential function. Together, these observations imply the following result. Convergence in potential games  However, it can be shown that converging to a NE may take an exponential (in the number of players) number of steps!

23. …turning our attention to the global connection game… Let  be the following function mapping any strategy vector S to a real value [Rosenthal 1973]:  (S) =  e  N(S)  e (S) where (recall that k e is the number of players using e)  e (S) = c e · H = c e · (1+1/2+…+1/k e ). keke

24. Let S=(P 1,…,P k ), let P’ i be an alternative path for some player i, and define a new strategy vector S’=(S -i,P’ i ). Then: Lemma 3 (  is a potential function)  (S) -  (S’) = cost i (S) – cost i (S’). Proof: When player i switches from P i to P’ i, some edges of N(S) increase their load by 1, some others decrease it by 1, and the remaining do not change it. Then, it suffices to notice that: If load of edge e increases by 1, its contribution to the potential function increases by c e /(k e +1) If load of edge e decreases by 1, its contribution to the potential function decreases by c e /k e  (S) -  (S’) =  (S) -  (S-P i +P’ i ) =  (S) – (  (S) -  e  P i c e /k e +  e  P’ i c e /(k e +1))= cost i (S) – cost i (S’).

25. Any instance of the global connection game has a pure Nash equilibrium, and best response dynamics always converges. Theorem 1 Proof: From Lemma 3, a GCG is a potential game, and from Lemma 1 and 2 best response dynamics converges to a pure NE. Existence of a NE  However, it can be shown that finding a best response for a player is NP-hard!

26. Price of Anarchy: a lower bound s 1,…,s k t 1,…,t k k 1 optimal network has cost 1 best NE: all players use the lower edge worst NE: all players use the upper edge PoS is 1 PoA is k 

27. Upper-bounding the PoA The price of anarchy in the global connection game with k players is at most k. Theorem 2 Proof: Let OPT=(P 1 *,…,P k * ) denote the optimal network, and let  i be a shortest path in G between s i and t i. Let w(  i ) be the length of such a path, and let S be any NE. Observe that cost i (S) ≤w(  i ) (otherwise the player i would change). Then: C(S) = cost i (S) ≤ w(  i ) ≤ w(P i * ) ≤ k·cost i (OPT) = k· C(OPT). i=1 k  k  k  k  (since a path is used by at most k players)

28. PoS for GCG: a lower bound 1+ ... 1 1/2 1/(k-1) 1/k 1/3 0 000 0 s1s1 sksk s2s2 s3s3 s k-1 t 1,…,t k  >o: small value

29. 1+ ... 1 1/2 1/(k-1) 1/k 1/3 0 000 0 s1s1 sksk s2s2 s3s3 s k-1 t 1,…,t k  >o: small value The optimal solution has a cost of 1+  is it stable? PoS for GCG: a lower bound

30. 1+ ... 1 1/2 1/(k-1) 1/k 1/3 0 000 0 s1s1 sksk s2s2 s3s3 s k-1 t 1,…,t k  >o: small value …no! player k can decrease its cost… is it stable? PoS for GCG: a lower bound

31. 1+ ... 1 1/2 1/(k-1) 1/k 1/3 0 000 0 s1s1 sksk s2s2 s3s3 s k-1 t 1,…,t k  >o: small value …no! player k-1 can decrease its cost… is it stable? PoS for GCG: a lower bound

32. 1+ ... 1 1/2 1/(k-1) 1/k 1/3 0 000 0 s1s1 sksk s2s2 s3s3 s k-1 t 1,…,t k  >o: small value The only stable network social cost: C(S)=  1/j = H k  ln k + 1 k-th harmonic number j=1 k PoS for GCG: a lower bound

33. Suppose that we have a potential game with potential function , and assume that for any outcome S we have Lemma 4 Proof: Let S’ be the strategy vector minimizing  (i.e., S’ is a NE) we have:  (S’)   (S*) C(S)/A   (S)  B C(S) for some A,B>0. Then the price of stability is at most AB. Let S* be the strategy vector minimizing the social cost  B C(S*) C(S’)/A   PoS ≤ C(S’)/C(S*) ≤ A·B.

34. Lemma 5 (Bounding  ) C(S)   (S)  H k C(S). For any strategy vector S in the GCG, we have:  (S) =  e  N(S)  e (S) =  e  N(S) c e · H k e Proof: Indeed:   (S)  C(S) =  e  N(S) c e and  (S) ≤ H k · C(S) =  e  N(S) c e · H k.

35. The price of stability in the global connection game with k players is at most H k, the k-th harmonic number. Theorem 3 Proof: From Lemma 3, a GCG is a potential game, and from Lemma 5 and Lemma 4 (with A=1 and B=H k ), its PoS is at most H k. Upper-bounding the PoS