A Message-Passing Paradigm for Resource Allocation

We propose a message-passing paradigm for resource allocation problems. This is a framework for decentralized management that generalizes price-based systems by allowing incentives to vary across activities and consumption levels. Message-based incentives are defined through a new equilibrium concept. We demonstrate that message-based incentives lead to systemoptimal behavior for convex resource allocation problems, yet yield allocations superior to those from price-based incentives for non-convex resource allocation problems. We describe a distributed and asynchronous algorithm for computing equilibrium messages and allocations, and demonstrate this in the context of a network resource allocation problem.