The Price of Fairness

Dimitris Bertsimas (), Vivek F. Farias () and Nikolaos Trichakis ()
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Dimitris Bertsimas: Operations Research Center, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139
Vivek F. Farias: Operations Research Center, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139
Nikolaos Trichakis: Operations Research Center, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139

Operations Research, 2011, vol. 59, issue 1, 17-31

Abstract: In this paper we study resource allocation problems that involve multiple self-interested parties or players and a central decision maker. We introduce and study the price of fairness, which is the relative system efficiency loss under a “fair” allocation assuming that a fully efficient allocation is one that maximizes the sum of player utilities. We focus on two well-accepted, axiomatically justified notions of fairness, viz., proportional fairness and max-min fairness. For these notions we provide a tight characterization of the price of fairness for a broad family of problems.

Keywords: analysis of algorithms; games/group decisions; bargaining; programming; multiple criteria; nonlinear; applications; algorithms (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (109)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:59:y:2011:i:1:p:17-31

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