Facility location games with externalities

Abstract

Facility location games study the scenario where a facility is to be placed based on the reported information from agents. In the society where there are relationships between agents, it is quite natural that one agent’s gain will affect other agents’ gain (either increase for a collaborator or decrease for a competitor). By using externality to represent this type of agent interaction, for the first time we introduce it into the facility location games in this paper. Namely, we study the extension where agents’ utilities will be affected by other agents. We derive necessary and sufficient conditions for well known existing mechanisms and also prove strong lower bounds.