1. Market Oriented Programming
Sai Rahul Reddy P
2/24/2019
Market Oriented Programming

2. Market Oriented Programming
What is Market Oriented Programming ?
Market-oriented programming (MOP) is a mathematical programming approach to distributed computation using selfish agents, based on market price mechanisms
MOP exploits the institution of markets to solve particular problems of distributed resource allocation
Comprises of two problems: Allocation and Pricing
Inspired in part by economists (market mechanisms) and also by AI (heterogeneous, self interested agents)
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Market Oriented Programming

3. Market Oriented Programming
Basics of Micro Economics …
Simple Supply and Demand curve
Demand
Supply
Price
Demand is that quantity of a good that consumers are not only willing to buy but also have the capacity to buy at the given price. For example, a consumer may be willing to purchase 2 lbs of potatoes if the price is $0.75 per lb. However, the same consumer may be willing to purchase only 1 lb. if the price is $1.00 per lb.
Supply is the quantity that producers are willing to sell at a given price. For example, the potato grower may be willing to sell 1 million lbs of potatoes if the price is $0.75 per lb and substantially more if the market price is $0.90 per lb. The main determinants of supply will be the market price of the good and the cost of producing it.
Demand Curve or Demand Schedule shows the relations ship between price and quantity demanded. In the above dotted line shows the Demand Curve.
Supply Curve shows the relation ship between price and quantity demanded.
Quantity
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Market Oriented Programming

4. Market Oriented Programming
Basics of Micro Economics …
Demand p1
Simple Demand curve
Price p2 q1 q2
Quantity
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Market Oriented Programming

5. Market Oriented Programming
Basics of Micro Economics …
Supply Curve p2
Supply p1
Price q1 q2
Quantity
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6. Market Oriented Programming
Basics of Micro Economics …
Equilibrium
Demand
Supply p1 pe
Price q1 qe q2
Quantity
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7. Market Oriented Programming
Example: Mungi
Price per unit of storage is price(€) = 1 + 4p€2exp(€/(1- €) -1), € (0< €<1) is the storage utilization of the system
Taxation function is t(β) = b[1-exp(-β/b)],
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8. Market Oriented Programming
Example: Load Balancing Problem
Cost of the job
The cost of buying μJ/rk CPU seconds at Pk.
The cost to cross the link to get to Pk.
The cost to get from the Pk to the processor at which J entered the system.
Job Preferences
Price Preference
Service time preference
Service and price preference
Economic Model
Auctions
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9. Market Oriented Programming
Other Examples
Spawn
Uses the monetary funding units as an abstract form of priority in distributed and heterogeneous systems.
The use of price information to control adaptive expansion and contraction of process trees in concurrent applications.
Data Management Economy
Flow Control Economy
Quality of service in computer networks
Multiple Access Protocols
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Market Oriented Programming

10. Market Oriented Programming
Mechanism Design 6
Given:
System comprising of self-interested, rational agents
Set of system wide goals
Mechanism Design
Does there exist a mechanism that can implement the goals ?
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Market Oriented Programming

11. Market Oriented Programming
Example: System “ABC”
ABC: A new breed of software agents??
System:
One Seller with a single indivisible good
N buyers (agents) each with value vi for the good (money value)
vi is known only to agent i
Value vi: Maximum value agent i is willing to pay for the good (Agent is indifferent between the good and the money value vi)
Goals:
G1: Sell the good to agent (buyer) with highest vi
G2: The buying agent pays vi to the seller for the good
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Market Oriented Programming

12. Market Oriented Programming
First Price Sealed Bid Auction
Mechanism
Each agent submits a sealed bid to the seller
Good is sold to the agent with the highest bid
The winning agent pays the quoted bid value to the seller
Does this mechanism implements G1 and G2?
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Market Oriented Programming

13. Market Oriented Programming
First Price Sealed Bid Auction: Agent Strategy
Overbid
If the agent wins, it has to pay more than it is worth
Bid True Value vi
If the agent wins, it has to pay its original value and the agent gains nothing
Underbid
Reduces the chance of winning
Less the agent pays than vi more it gains
Strategy: Bid slightly more than the expected second highest price
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Market Oriented Programming

14. Market Oriented Programming
Vickrey Auction
Mechanism
Each agent submits a sealed bid to the seller
Good is sold to the agent with the highest bid
The winning agent pays the second highest bid value to the seller
Does this mechanism implements G1 and G2?
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Market Oriented Programming

15. Market Oriented Programming
Vickrey Auction : Agent Strategy
Overbid X
If the agent is the real winner and wins, it gains nothing
If the agent is not the real winner and wins by overbidding, it may pay more than its value
Underbid X
The agent may lose by underbidding
Bid True Value vi 
Best Strategy
Tell the truth independent of what agents do (Dominant Strategy)
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16. Market Oriented Programming
English Auction
Mechanism
Open out-cry ascending price auction
Starts with a minimum bid value quoted by the seller
Agent can revise the bid amount upward by a minimum increment 
Auction ends when bidding stops
Highest bidder gets the object and pays the amount quoted
Does this mechanism implements G1 and G2?
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17. Market Oriented Programming
Evaluation of Auctions ?
Allocation Efficiency
Revenues
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18. Market Oriented Programming
References
Ferguson, D., et al, Microeconomic algorithms for load balancing in distriuted computer systems, Proc. 8th Int'l Conf. Distributed Computing Systems.
Ferguson, D et al, Economic models for allocating resources in computer systems,Book: Market-based control: a paradigm for distributed resource allocation.
G. Heiser, F. Lam, and S. Russell, Resource Management in the Mungi Single-Address-Space Operating System, Proceedings of Australasian Computer Science Conference.
Wellman, MP, Market-Oriented Programming: Some Early lessons, Book: Market-based control: a paradigm for distributed resource allocation
(Slides Taken)
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19. Market Oriented Programming
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20. Market Oriented Programming
Load Balancing In Clusters
Jobs Assignment
For each machine in a cluster of n machines, with resources r1, r2, rk. The machine’s cost is defined as k
∑f( n, utilization of ri ).
i=1
Where f is some function. Jobs are assigned to resources in such a way to minimizes this marginal cost.
Jobs Re-assignment
When a job terminates we will check the stability condition for each job j and each machine M. If stability condition fails the job is reassigned in such a way that minimizes the marginal cost.
2/24/2019
Market Oriented Programming