Jeffrey K. MacKie-Mason

Why Share on Peer-to-Peer Networks? (Download full paper)

Lian Jian and Jeffrey K. MacKie-Mason

Published on: August, 2008

Abstract: Prior theory and empirical work emphasize the enormous free-riding problem facing peer-to-peer (P2P) sharing networks. Nonetheless, many P2P networks thrive. We explore two possible explanations: private provision of public goods and generalized reciprocity. We investigate a particular form of private incentives to share content: redistributing traffic in the network to the advantage of the sharing peer. Our preliminary model suggests that this incentive is likely insufficient to motivate equilibrium content sharing in large networks. We then approach P2P networks as a graph-theoretic problem and derive sufficient conditions for sharing and free-riding to co-exist in the absence of direct sharing benefits or an explicit incentive mechanism.

Security When People Matter: Structuring Incentives for User Behavior (Download full paper)

MacKie-Mason, Jeffrey K. and Wash, Rick

Published on: January, 2007

Abstract: Humans are “smart components” in a system, but cannot be directly programmed to perform; rather, their autonomy must be respected as a design constraint and incentives provided to induce desired behavior. Sometimes these incentives are properly aligned, and the humans don’t represent a vulnerability. But often, a misalignment of incentives causes a weakness in the system that can be exploited by clever attackers. Incentive-centered design tools help us understand these problems, and provide design principles to alleviate them. We describe incentive-centered design and some tools it provides. We provide a number of examples of security problems for which Incentive Centered Design might be helpful. We elaborate with a general screening model that offers strong design principles for a class of security problems.

Using Uncensored Communication Channels to Divert Spam Traffic (Download full paper)

Chiao, Benjamin and MacKie-Mason, Jeffrey K.

Published on: September, 2006

Abstract: We offer a microeconomic model of the market for bulk commercial advertising email (the dominant form of spam). We adopt an incentive-centered design approach to develop a simple, feasible improvement to the current email system: an uncensored communication channel. Such a channel could be an email folder or account, to which properly tagged commercial solicitations are routed. We characterize the circumstances under which spammers would voluntarily move much of their spam into the open channel, leaving the traditional email channel dominated by person-to-person, non-spam mail. Our method follows from observing that there is a real demand for unsolicited commercial email, so that everyone can be made better off if a channel is provided for spammers to meet spam-demanders. As a bonus, the absence of filtering in an open channel restores to advertisers the incentive to make messages truthful, rather than to disguise them to avoid filters. We show show that all email recipients are better off when an open channel is introduced. Only recipients wanting spam will use the open channel enjoying the less disguised messages, and for all recipients the satisfaction associated with desirable mail received increases, and dissatisfaction associated with undesirable received and desirable mail filtered out decreases.

Incentive-Centered Design for Information Security (Download full paper)

Rick Wash and Jeffrey K. MacKie-Mason

Published on: July, 2006

Abstract: Humans are "smart components" in a system, but cannot be directly programmed to perform; rather, their autonomy must be respected as a design constraint and incentives provided to induce desired behavior. Sometimes these incentives are properly aligned, and the humans don't represent a vulnerability. But often, a misalignment of incentives causes a weakness in the system that can be exploited by clever attackers. Incentive-centered design tools help us understand these problems, and provide design principles to alleviate them. We describe incentive-centered design and some tools it provides. We provide a number of examples of security problems for which incentive- centered design might be helpful. We elaborate with a general screening model that offers strong design principles for a class of security problems.

Online Fund-Raising Mechanisms: A Field Experiment (Download full paper)

Yan Chen, Xin Li, and Jeffrey K. MacKie-Mason

Published on: January, 2006

Abstract: We implemented one of the first web-based online field experiments of fund-raising. We embedded our experiment in the Internet Public Library to test comparatively four mechanisms: Voluntary Contribution (VCM), Premium, Seed Money and Matching. The Premium and Matching mechanisms each generate higher contribution rate than VCM, while the gift size is not significantly different across mechanisms. Because this is one of the earliest embedded, web-based field experiments we report our methodology findings in some detail. Using pop-up windows and asking for non-privacy-invasive geographic information were ineffective as participant assignment techniques. Evidence of desire to donate inferred from participant clickstream data is a poor predictor of actual giving.

Self-Confirming Price Prediction for Bidding in Simultaneous Ascending Auctions (Download full paper)

Anna Osepayshvili, Michael P. Wellman, Daniel M. Reeves, and Jeffrey K. MacKie-Mason

Published on: July, 2005

Abstract: Simultaneous ascending auctions present agents with the exposure problem: bidding to acquire a bundle risks the possibility of obtaining an undesired subset of the goods. Auction theory provides little guidance for dealing with this problem. We present a new family of decisiontheoretic bidding strategies that use probabilistic predictions of final prices. We focus on selfconfirming price distribution predictions, which by definition turn out to be correct when all agents bid decision-theoretically based on them. Bidding based on these is provably not optimal in general, but our experimental evidence indicates the strategy can be quite effective compared to other known methods.

Automated Markets and Trading Agents (Download full paper)

Jeffrey K. MacKie-Mason and Michael P. Wellman

Published on: April, 2005

Abstract: Computer automation has the potential, just starting to be realized, of transforming the design and operation of markets, and the behaviors of agents trading in them. We discuss the possibilities for automating markets, presenting a broad conceptual framework covering resource allocation as well as enabling marketplace services such as search and transaction execution. One of the most intriguing opportunities is provided by markets implementing computationally sophisticated negotiation mechanisms, for example combinatorial auctions. An important theme that emerges from the literature is the centrality of design decisions about matching the domain of goods over which a mechanism operates to the domain over which agents have preferences. When the match is imperfect (as is almost inevitable), the market game induced by the mechanism is analytically intractable, and the literature provides an incomplete characterization of rational bidding policies. A review of the literature suggests that much of our existing knowledge comes from computational simulations, including controlled studies of abstract market designs (e.g., simultaneous ascending auctions), and research tournaments comparing agent strategies in a variety of market scenarios. An empirical game-theoretic methodology combines the advantages of simulation, agent-based modeling, and statistical and game-theoretic analysis.

Exploring bidding strategies for market-based scheduling (Download full paper)

Daniel M. Reeves, Michael. P. Wellman, Jeffrey K. MacKie-Mason, and Anna Osepayshvili

Published on: March, 2005

Abstract: A market-based scheduling mechanism allocates resources indexed by time to alternative uses based on the bids of participating agents. Agents are typically interested in multiple time slots of the schedulable resource, with value determined by the earliest deadline by which they can complete their corresponding tasks. Despite the strong complementarity among slots induced by such preferences, it is often infeasible to deploy a mechanism that coordinates allocation across all time slots. We explore the case of separate, simultaneous markets for individual time slots, and the strategic problem it poses for bidding agents. Investigation of the straightforward bidding policy and its variants indicates that the efficacy of particular strategies depends critically on preferences and strategies of other agents, and that the strategy space is far too complex to yield to general game-theoretic analysis. For particular environments, however, it is often possible to derive constrained equilibria through evolutionary search methods.

Auction Protocols for Decentralized Scheduling (Download full paper)

Wellman, M. P., W. E. Walsh, P. R. Wurman and Jeffrey K. MacKie-Mason

Published on: January, 2001

Abstract: Scheduling is the problem of allocating resources to alternate possible uses over designated periods of time. Several have proposed (and some have tried) market-based approaches to decentralized versions of the problem, where the competing uses are represented by autonomous agents. Market mechanisms use prices derived through distributed bidding protocols to determine an allocation, and thus solve the scheduling problem. To analyze the behavior of market schemes, we formalize decentralized scheduling as a discrete resource allocation problem, and bring to bear some relevant economic concepts. Drawing on results from the literature, we discuss the existence of equilibrium prices for some general classes of scheduling problems, and the quality of equilibrium solutions. To remedy the potential nonexistence of price equilibria due to complementarity in preference, we introduce additional markets in combinations of basic goods. We present some auction mechanisms and bidding protocols corresponding to the two market structures, and analyze their computational and economic properties. Finally, we consider direct revelation mechanisms, and compare to the market-based approach.

The Case for Market-based Push Caching (Download full paper)

MacKie-Mason, Jeffrey K. Chan, Yee Man Womer, Jonathan Jamin, Sugih

Published on: November, 1999

Variable QoS from Shared Web Caches: User-Centered Design and Value-Sensitive Replacement (Download full paper)

Terence P. Kelly, Sugih Jamin and Jeffrey K. MacKie-Mason

Published on: June, 1999

Abstract: Due to differences in server capacity, external bandwidth and client demand, some Web servers value cache hits more than others. Assuming that a shared cache knows the extent to which different servers value hits, it may employ a value-sensitive replacement policy in order to generate maximum aggregate value for servers. we consider both the prediction and value aspects of this problem and introduce a novel value-sensitive LFU/LRU hybrid which biases the allocation of cache space toward documents whose origin servers value caching most highly. We compare our algorithm with others from the Web caching literature and discuss from an economic standpoint the problems associated with obtaining servers' private valuation information.

Bilateral Negotiation With Fees (Download full paper)

Anderson, A., I. Birgean and J. MacKie-Mason

Published on: March, 1999

Abstract: Bilateral negotiation over a single good or service is a fundamental problem for automated systems, and is surprisingly resistant to general solutions. In this paper we offer advice and new results for the design of electronic negotiation and market systems. We review the theoretical and experimental literature as guide to pragmatic design. We then investigate how some well-studied simple mechanisms could be extended with transaction and entry fees to improve their efficiency or their budget balance. The goal is to support pragmatic design for online automated transactions. We find that an iterated Generalized Vickrey Auction with fees can maintain budget balance and improve trading efficiency over a single-shot GVA. For k-double auctions we find that when processing costs are a function of the number of bids then efficiency favors entry fees, while transactions fees are favored if processing costs are a function of the number of transactions. We present simulations to support our theoretical conclusions.

Biased Replacement Policies for Web Caches: Differential Quality-of-Service and Aggregate User Value (Download full paper)

MacKie-Mason, Jeffrey K. Kelly, Terence P. Chan, Yee Man Jamin, Sugih

Published on: January, 1999

Abstract: Disk space in shared Web caches can be diverted to serve some system users at the expense of others. Cache hits reduce server loads, and if servers desire load reduction to different degrees, a replacement policy which prioritizes cache space across servers can provide differential quality-of-service (QoS). We present a simple generalization of least-frequently-used (LFU) replacement that is sensitive to varying levels of server valuation for cache hits. Through trace-driven simulation we show that under a particular assumption about server valuations our algorithm delivers a reasonable QoS relationship: higher byte hit rates for servers that value hits more. We furthermore adopt the economic perspective that value received by system users is a more appropriate performance metric than hit rate or byte hit rate, and demonstrate that our algorithm delivers higher "social welfare" (aggregate value to servers) than LRU or LFU.

Network Architecture and Content Provision: An Economic Analysis (Download full paper)

MacKie-Mason, Jeffrey K., Scott Shenker and Hal Varian

Published on: January, 1996

Abstract: An earlier version of Service Architecture and Content Provision, as presented at the Telecom Policy Research Conference 1995. There are some additional mathematical examples, and a short section on the effects of architecture on content creation that we did not include in the published version.

Pricing Congestible Resources (Download full paper)

MacKie-Mason, Jeffrey K. and Hal Varian

Published on: September, 1995

Abstract: We describe the basic economic theory of pricing a congestible resource such as an ftp server, a router, a Web site, etc. In particular, we examine the implications of "congestion pricing" as a way to encourage efficient use of network resources. We explore the implications of flat pricing and congestion pricing for capacity expansion in centrally planned, competitive, and monopolistic environments

Generalized Vickrey Auctions (Download full paper)

Varian, Hal R. and Jeffrey K. MacKie-Mason

Published on: July, 1994

Abstract: We describe a generalization of the Vickrey auction. Our mechanism extends the auction to implement efficient allocations for problems with more than one good, multiple units for the goods, and externalities. The primary restriction on preferences is that they must be quasilinear.

One Size Doesn't Fit All: Improving Network QoS Through Preference-driven Web Caching (Download full paper)

Chan, Yee Man, Jonathan Womer, Jeffrey K. MacKie-Mason and Sugih Jamin

Abstract: In order to combat Internet congestion Web caches use replacement policies that attempt to keep the objects in a cache that are most likely to get requested in the future. We adopt the economic perspective that the objects with the greatest value to the users should be in a cache. Using trace driven simulations we implement an incentive compatible market-based Web cache for servers to push content into a cache. This system decentralizes the caching process as servers provide information in the form of bids for space in the cache. Truthful information from the server on valuations of objects and predictions of hit rates is obtained. This information is used in filling the cache, which can provide increased aggregate value and differential quality of service to servers when compared to LFU and LRU.

System Design, User Cost and Electronic Usage of Journals (Download full paper)

Gazzale, Robert S. and Jeffrey K. MacKie-Mason

Abstract: Dramatic increases in the capabilities and decreases in the costs of computers and communi-cation networks have fomented revolutionary thoughts in the scholarly publishing community. In one dimension, traditional pricing schemes and product packages are being modified or re-placed. We designed and undertook a large-scale field experiment in pricing and bundling for electronic access to scholarly journals: PEAK. We provided Internet-based delivery of content from 1200 Elsevier Science journals to users at multiple campuses and commercial facilities. Our primary research objective was to generate rich empirical evidence on user behavior when faced with various bundling schemes and price structures. In this article we explain the different types and levels of cost that users faced when accessing individual articles, and report on the ef-fect of these costs on usage. We found that both monetary and non-monetary user costs have a significant impact on the demand for electronic access. We also estimate how taking user costs into account would change the "optimal" (least cost) bundle of access options that an institution should purchase.

A Smart Market for Resource Reservation in a Multiple Quality of Service Information Network (Download full paper)

MacKie-Mason, Jeffrey K.

Abstract: The technology is nearly available to offer remarkably powerful new communications services: multiple streams, from multiple users, composed of different applications that require different qualities of service (QoS), all travelling over a single interconnected physical infrastructure. Society will benefit from integrated applications (video conferencing with interactive demos and shared whiteboards; computer-integrated telephony, etc.). However, we are a long way from from free, broadband, "anytime, anywhere" integrated services networks. Allocation of scarce resources in a multiple quality of service network may be the single greatest barrier to communications anytime, anywhere. In this paper I present a fairly general model of the problem, and, after showing that a decentralized open market will fail, I propose a "smart market" mechanism for solving the problem. The smart market implements simultaneously efficient routing and bandwidth allocation for reservations made in advance. As computing speed improves, the length of the advance reservation interval can be shortened.

A Market-Based Approach to Optimal Resource Allocation in Integrated-Services connection-Oriented Networks (Download full paper)

Panagiotis Thomas, Demosthenis Teneketzis and Jeffrey K. MacKie-Mason

Abstract: We present an approach to the admission control and resource allocation problem in connection-oriented networks that offer multiple services to users. Users' preferences are summarized by means of their utility functions, and each user is allowed to request more than one type of service. Multiple types of resources are allocated at each link along the path of a connection. We assume that the relation between Quality of Service (QoS) and resource allocation is given, and we incorporate it as a constraint into a static optimization problem. The objective of the optimization problem is to determine the amount and, required resources for each type of service to maximize the sum of the users' utilities. We prove the existence of a solution of the optimization problem, and describe a competitive market economy that implements the solution and satisfies the informational constraints imposed by the nature of the decentralized resource allocation problem. The economy consists of four different types of agents: resource providers, service providers, users, and an auctioneer that regulates the prices based on the observed aggregate excess demand. The goods that are sold are: (i) the resources at each link of the network; and (ii) services constructed from these resources and then delivered to users. We specify an iterative procedure that is used by the auctioneer to update the prices, and we show that it leads to an allocation that is arbitrarily close to a solution of the optimization problem in a finite number of iterations.

Feedback And Efficiency In ATM Networks (Download full paper)

Murphy, Liam, John Murphy, and Jeffrey K. MacKie-Mason

Abstract: Admission control and congestion control can provide performance guarantees in ATM networks. However some users may not be able to describe their traffic accurately enough for the network to provide these guarantees. By sending a dynamic feedback signal about the current utilization of network resources, the network could provide some guarantees to adaptive users who respond appropriately: this is the basis of ABR service. We outline a user-oriented framework for network operation and control, explicitly defining how such feedback is generated by the network and what form it takes. We show through simulations that it is possible to simultaneously gain both network and economic efficiency by using a form of feedback we call responsive pricing, which is compatible with current ATM Forum UNI specifications.

The Role of Responsive Pricing in the Internet (Download full paper)

MacKie-Mason, Jeffrey K., Liam Murphy and John Murphy

Abstract: The recent introduction of user-friendly navigation and retrieval tools for the World Wide Web has triggered an unprecedented level of interest in the Internet among the media and the general public, as well as in the technical community. It seems inevitable that some changes or additions are needed in the control mechanisms used to allocate usage of Internet resources. We argue that a feedback signal in the form of a variable price for network service is a workable tool to aid network operators in controlling Internet traffic. We suggest that these prices should vary dynamically based on the current utilization of network resources. We show how this responsive pricing puts control of network service back where it belongs: with the users.

Some Economics of the Internet (Download full paper)

MacKie-Mason, Jeffrey K. and Hal Varian

Abstract: This paper overlaps substantially with the paper Pricing the Internet. We describe the history, technology and costs of the Internet (at greater length than in "Pricing"). We describe a "smart market" for pricing Internet congestion. There is more attention to the smart market, and less to other pricing considerations, than in "Pricing."

Some FAQs about Usage-Based Pricing (Download full paper)

MacKie-Mason, Jeffrey K. and Hal Varian

Abstract: Written for WWW '94 (Chicago). We answer some frequently asked questions about usage-sensitive pricing for Internet resources.

Name: STIET podcast Oct 2007 (Download artifact)

Released on: October, 2007

Description: A podcast interview with Jeff MacKie-Mason and Tom Finholt about the STIET ICD project

Name: STIET movie Oct 2007 (Download artifact)

Released on: October, 2007

Description: A short marketing movie about the STIET ICD research program, prepared by the UM News Service