All-Pay Auction Scheme for Profit Maximization in Edge Computing Offloading System

Core Concepts

Proposing an equilibrium pricing scheme based on all-pay auction model to maximize profit in edge offloading system.

Abstract

The content discusses the importance of pricing in mobile edge computing and proposes an equilibrium pricing scheme based on the all-pay auction model. The scheme aims to stimulate end users to offload tasks by ensuring they can access services at a lower price than the value of the required resource. By dividing bidders into sets based on price, the scheme prevents cases where users receive no service due to low prices. Simulation results show that this approach effectively maximizes total profit and ensures service access for all end users. The proposed scheme addresses drawbacks of existing strategies and focuses on maximizing profit while incentivizing edge devices to provide services.

Stats

Extensive simulation results demonstrate the proposed scheme's effectiveness in maximizing total profit.
The reservation value is set higher than the value of EC resources to ensure fair market conditions.
Equilibrium bid function is derived to stimulate active task offloading by EUs.
Optimal reservation values are calculated to guarantee EC benefits and participation.
Allocation algorithm divides bidding EUs into sets for efficient service provision.

Quotes

Key Insights Distilled From

All-pay Auction Based Profit Maximization in End-to-End Computation Offloading System

by Hai Xue,Yun ... at arxiv.org 03-15-2024

https://arxiv.org/pdf/2403.09129.pdf

Deeper Inquiries

How does the proposed equilibrium pricing scheme impact competition among end users

The proposed equilibrium pricing scheme based on the all-pay auction model significantly impacts competition among end users in an edge computing environment. By requiring all bidders to pay their quoted price regardless of winning, it creates a level playing field where each end user must carefully consider their bid strategy. This approach eliminates the possibility of free-riding or underbidding, as all participants have a stake in the bidding process. As a result, competition intensifies as end users strive to optimize their bids to maximize their chances of winning while balancing the cost they are willing to pay.
Moreover, by setting reservation values that ensure fair compensation for edge cloud resources and stimulating active participation through lower equilibrium bids than the resource value itself, the scheme encourages healthy competition among end users. It motivates them to engage proactively in offloading tasks and increases overall system efficiency by ensuring that services are allocated efficiently based on competitive bidding.

What potential challenges or limitations could arise from implementing an all-pay auction model in edge computing

Implementing an all-pay auction model in edge computing may present several challenges and limitations that need careful consideration. One potential challenge is related to bidder behavior and strategic considerations. In an all-pay auction, bidders incur costs regardless of whether they win or lose, which can lead to aggressive bidding strategies aimed at outbidding competitors rather than reflecting true valuations accurately. This could distort pricing mechanisms and impact system efficiency if not managed effectively.
Another limitation is the complexity introduced by incorporating risk preferences into bidding behavior within the auction model. Risk-loving individuals may be more inclined to participate actively due to lower equilibrium bids but could also introduce volatility into the system if not properly regulated. Balancing risk preferences with fair pricing mechanisms poses a significant challenge when designing and implementing such models in practice.
Furthermore, operational challenges such as scalability issues with increasing numbers of bidders or computational overheads associated with managing multiple auctions simultaneously can arise when deploying complex auction models like this in real-world edge computing systems.

How might incorporating risk preferences of end users influence bidding behavior and overall system performance

Incorporating risk preferences of end users into bidding behavior can have a profound impact on both individual bidding strategies and overall system performance within an edge computing environment operating under an all-pay auction model.
Risk-loving individuals who are attracted by lower equilibrium bids compared to resource values might exhibit more aggressive bidding behaviors aiming for higher rewards despite potential losses incurred from paying bid prices upfront.
This dynamic introduces variability into bid outcomes as risk-tolerant bidders may drive up prices through competitive actions leading potentially higher revenues for service providers but also increased costs for successful bidders.
On the other hand, risk-averse participants might adopt more conservative approaches resulting in fewer participations reducing revenue generation opportunities but potentially stabilizing bid dynamics.
Balancing these diverse risk profiles becomes crucial for optimizing system performance ensuring competitiveness while maintaining fairness across different types of end-users participating in auctions within edge computing environments using this pricing mechanism.
Ultimately understanding how various levels of risk aversion influence individual decisions collective behaviors will be essential for designing effective incentive structures maximizing benefits across stakeholders involved in computation offloading processes within these systems