Facility Location Problem with Aleatory Agents

Abstract

In this paper, we introduce and study the Facility Location Problem with Aleatory Agents (FLPAA), where the facility accommodates n agents larger than the number of agents reporting their preferences, namely n_r. The spare capacity is used by n_u=n-n_r aleatory agents sampled from a probability distribution \mu. The goal of FLPAA is to find a location that minimizes the ex-ante social cost, which is the expected cost of the n_u agents sampled from \mu plus the cost incurred by the agents reporting their position. We investigate the mechanism design aspects of the FLPAA under the assumption that the Mechanism Designer (MD) lacks knowledge of the distribution $\mu$ but can query k quantiles of \mu. We explore the trade-off between acquiring more insights into the probability distribution and designing a better-performing mechanism, which we describe through the strong approximation ratio (SAR). The SAR of a mechanism measures the highest ratio between the cost of the mechanisms and the cost of the optimal solution on the worst-case input x and worst-case distribution \mu, offering a metric for efficiency that does not depend on \mu. We divide our study into four different information settings: the zero information case, in which the MD has access to no quantiles; the median information case, in which the MD has access to the median of \mu; the n_u-quantile information case, in which the MD has access to n_u quantiles of its choice, and the k-quantile information case, in which the MD has access to k<n_u quantiles of its choice. For all frameworks, we propose a mechanism that is optimal or achieves a small constant SAR and pairs it with a lower bound on the SAR. In most cases, the lower bound matches the upper bound, thus no truthful mechanism can achieve a lower SAR. Lastly, we extend the FLPAA to include instances in which we must locate two facilities.