Premium First‐passage percolation on a ladder graph, and the path cost in a VCG auctionPremium

Author(s)

Flaxman Abraham,

Gamarnik David,

Sorkin Gregory B.

Publication year2011

Publication title

random structures and algorithms

Resource typeJournals

PublisherWiley Subscription Services

Abstract This paper studies the time constant for first‐passage percolation, and the Vickrey‐Clarke‐Groves (VCG) payment, for the shortest path on a ladder graph (a width‐2 strip) with random edge costs, treating both in a unified way based on recursive distributional equations. For first‐passage percolation where the edge costs are independent Bernoulli random variables we find the time constant exactly; it is a rational function of the Bernoulli parameter. For first‐passage percolation where the edge costs are uniform random variables we present a reasonably efficient means for obtaining arbitrarily close upper and lower bounds. Using properties of Harris chains we also show that the incremental cost to advance through the medium has a unique stationary distribution, and we compute stochastic lower and upper bounds. We rely on no special properties of the uniform distribution: the same methods could be applied to any well‐behaved, bounded cost distribution. For the VCG payment, with Bernoulli‐distributed costs the payment for an n ‐long ladder, divided by n , tends to an explicit rational function of the Bernoulli parameter. Again, our methods apply more generally. © 2011 Wiley Periodicals, Inc. Random Struct. Alg., 38, 350‐364, 2011

Subject(s)aerospace engineering , bernoulli distribution , bernoulli's principle , biology , bounded function , combinatorics , computer science , constant (computer programming) , engineering , evolutionary biology , function (biology) , graph , mathematical analysis , mathematical optimization , mathematics , path (computing) , programming language , random graph , random variable , shortest path problem , statistics

Language(s)English

SCImago Journal Rank1.314

H-Index69

eISSN1098-2418

pISSN1042-9832

DOI10.1002/rsa.20328

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