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The Price of Fairness

Author

Listed:
  • Dimitris Bertsimas

    (Operations Research Center, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139)

  • Vivek F. Farias

    (Operations Research Center, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139)

  • Nikolaos Trichakis

    (Operations Research Center, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139)

Abstract

In this paper we study resource allocation problems that involve multiple self-interested parties or players and a central decision maker. We introduce and study the price of fairness, which is the relative system efficiency loss under a “fair” allocation assuming that a fully efficient allocation is one that maximizes the sum of player utilities. We focus on two well-accepted, axiomatically justified notions of fairness, viz., proportional fairness and max-min fairness. For these notions we provide a tight characterization of the price of fairness for a broad family of problems.

Suggested Citation

  • Dimitris Bertsimas & Vivek F. Farias & Nikolaos Trichakis, 2011. "The Price of Fairness," Operations Research, INFORMS, vol. 59(1), pages 17-31, February.
    • Handle: RePEc:inm:oropre:v:59:y:2011:i:1:p:17-31
    DOI: 10.1287/opre.1100.0865
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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