Paper detail

Mechanism Design via Dantzig-Wolfe Decomposition

In random allocation rules, typically first an optimal fractional point is calculated via solving a linear program. The calculated point represents a fractional assignment of objects or more generally packages of objects to agents. In order to implement an expected assignment, the mechanism designer must decompose the fractional point into integer solutions, each satisfying underlying constraints. The resulting convex combination can then be viewed as a probability distribution over feasible assignments out of which a random assignment can be sampled. This approach has been successfully employed in combinatorial optimization as well as mechanism design with or without money. In this paper, we show that both finding the optimal fractional point as well as its decomposition into integer solutions can be done at once. We propose an appropriate linear program which provides the desired solution. We show that the linear program can be solved via Dantzig-Wolfe decomposition. Dantzig-Wolfe decomposition is a direct implementation of the revised simplex method which is well known to be highly efficient in practice. We also show how to use the Benders decomposition as an alternative method to solve the problem. The proposed method can also find a decomposition into integer solutions when the fractional point is readily present perhaps as an outcome of other algorithms rather than linear programming. The resulting convex decomposition in this case is tight in terms of the number of integer points according to the Carath{é}odory's theorem.