An individually rational, budget-balanced mechanism that implements in Nash equilibria the solution of the unicast service provisioning problem

We consider the decentralized bandwidth/rate allocation problem in unicast service provisioning with strategic users. We present a mechanism/game form that has the following desirable features. (1) It implements in Nash equilibria the solution of the corresponding centralized rate allocation problem in unicast service provisioning. (2) It is individually rational. (3) It is budget-balanced at all Nash equilibria of the game induced by the mechanism/game form as well as off equilibrium. When the utilities of the users are quasi-concave the mechanism possesses properties (2) and (3) stated above. Moreover, every Nash equilibrium of the game induced by the proposed mechanism results in a Walrasian equilibrium. We provide an intuitive interpretation of the mechanism, and discuss problems that need further investigation.