We focus on economic management of web services in distributed multimedia
systems. We dig deeper into mechanism design approaches tracing them back to
classical economic mechanisms of market designs and information economics which I
refer to as Hayek-Hurwicz mechanism design – due to Austrian-British economist F.A.
Hayek and American economist L. Hurwicz. The basic idea of market agents as
computationally efficient human agents induced by incentive compatability and
selfishness have been rediscovered and reapplied in rigorous methodological form by
computer scientists merging algorithmic game theory, computability and network
complexity. Distributed algorithmic mechanism design (DAMD) for internet resource
allocation indistributed systems is akin to an equilibrium converging market based economy
where selfish agents maximize utility and firms seek to maximize profits and
the state keeps an economic order providing basic public goods and public safety.A
distributed algorithmic mechanism design thus consists of three components: a feasible
strategy space at the network nodes for each agent or autonomous system, an
aggregated outcome function computed by the mechanism and a set of multi-agent
prescribed strategies induced by the mechanism. A distributed algorithmic mechanism
design being computationally efficient in a large decentralized Internet economy is a
powerful paradigm to substantiate claims by Hayek (1945) that an industrialized
economy based on market principles has an overall better output and growth
performance (static and ynamic) than socialist type economies of a similar nature and
scale. Best economic coordination through markets producing maximal social welfare
is supported by computational efficiency in computer science. Applications relate to a
data management economy.
Keywords: Algorithmic Game Theory (AGT), Autonomous System (AS),
Congestion Problems, Distributed Algorithmic Mechanism Design (DAMD),
Hayek-Hurwicz Mechanism Design, Incentive Compatibility, Information
Economics, Mechanism Design, Multi-media Systems, Network Complexity,
Scalability, Server Economy, Vickrey Auction.
