Decentralized network resource allocation as a repeated noncooperative market game

Market-based methods are an emerging paradigm for controlling large decentralized systems. We introduce in this paper a bidding mechanism for allocation of Internet resources among competing agents, and study it from a game-theoretic perspective. We prove the existence and the uniqueness of Nash equilibrium and present an update algorithm that allows users to converge to the Nash equilibrium in a decentralized manner using feedback of only the common information available to the resource. The necessary conditions for local stability of relaxed versions of the algorithm are derived and verified by simulations.