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Can Economics-based Resource Allocation Prove Effective in a Computation Marketplace?

Published

Author(s)

Kevin L. Mills, Christopher E. Dabrowski

Abstract

Several companies offer computation on demand for a fee. More companies are expected to enter this business over the next decade, leading to a marketplace for computation resources. Resources will be allocated through economic mechanisms that establish the relative values of providers and customers. Society at large should benefit from discoveries obtained through the vast computing power that will become available. Given such a computation marketplace, can economics-based resource allocation provide benefits for providers, customers and society? To investigate this question, we simulate a grid economy where individual providers and customers pursue their own ends and we measure resulting effects on system welfare. In our experiments, customers attempt to maximize their individual utilities, while providers pursue strategies chosen from three classes: information-free, utilization-based and economics-based. We find that, during periods of excess demand, economics-based strategies yield overall resource allocation that benefits system welfare. Further, economics-based strategies respond well to sudden overloads caused by temporary provider failures. During periods of moderate demand, we find that economics-based strategies provide ample system welfare, comparable with that of utilization-based strategies. We also identify and discuss key factors that arise when using economic mechanisms to allocate resources in a computation marketplace.
Citation
Journal of Grid Computing Special Issue on Grid Economics and Business Models
Volume
6
Issue
3

Keywords

Computation Economy, Distributed Resource Allocation, Global Behavior, Grid Computing

Citation

Mills, K. and Dabrowski, C. (2008), Can Economics-based Resource Allocation Prove Effective in a Computation Marketplace?, Journal of Grid Computing Special Issue on Grid Economics and Business Models (Accessed July 23, 2024)

Issues

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Created September 15, 2008, Updated March 2, 2018