From Cost Sharing Mechanisms to Online Selection Problems
Author(s)Elmachtoub, Adam N.; Levi, Retsef
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We consider a general class of online optimization problems, called online selection problems, where customers arrive sequentially, and one has to decide upon arrival whether to accept or reject each customer. If a customer is rejected, then a rejection cost is incurred. The accepted customers are served with minimum possible cost, either online or after all customers have arrived. The goal is to minimize the total production costs for the accepted customers plus the rejection costs for the rejected customers. These selection problems are related to online variants of offline prize collecting combinatorial optimization problems that have been widely studied in the computer science literature. In this paper, we provide a general framework to develop online algorithms for this class of selection problems. In essence, the algorithmic framework leverages any cost sharing mechanism with certain properties into a poly-logarithmic competitive online algorithm for the respective problem; the competitive ratios are shown to be near-optimal. We believe that the general and transparent connection we establish between cost sharing mechanisms and online algorithms could lead to additional online algorithms for problems beyond the ones studied in this paper.
DepartmentSloan School of Management
Mathematics of Operations Research
Institute for Operations Research and the Management Sciences (INFORMS)
Elmachtoub, Adam N., and Retsef Levi. “From Cost Sharing Mechanisms to Online Selection Problems.” Mathematics of OR 40, no. 3 (August 2015): 542–557.
Author's final manuscript