Generalized proportional allocation mechanism design for multi-rate multicast service on the Internet

In multicast transmission on the Internet, agents are divided into multicast groups based on the content they demand. In addition, when multi-rate transmission is used, each user in the same multicast group may request different quality of service for the same content. With multi-rate multicast transmission, each link on the network carries only the highest quality content of each multicast group passing through this link, thus resulting in substantial resource savings compared to unicast transmission. In this paper a mechanism is constructed that fully implements social welfare maximising allocation in Nash equilibria for the case of multi-rate multicast service under the assumption of strategic agents for whom utilities are private information. The emphasis of this work is on full implementation, which means that all pure strategy Nash equilibria of the induced game result in the optimal allocations of the centralised allocation problem. The mechanism, which is constructed in a quasi-systematic way starting from the dual of the centralized problem, has a number of additional useful properties. Specifically, the proposed mechanism results in feasible allocation (in fact in Pareto optimal allocation) even off-equilibrium. Finally, in the extended version of this paper it is shown how strong budget balance at equilibrium can be added to the proposed mechanism in a straightforward manner.