Efficiency and Stability in Euclidean Network Design

Network Design problems typically ask for a minimum cost sub-network from a given host network. This classical point-of-view assumes a central authority enforcing the optimum solution. But how should networks be designed to cope with selfish agents that own parts of the network? In this setting, agents will deviate from a minimum cost network if this decreases their individual cost. Hence, designed networks should be both efficient in terms of total cost and stable in terms of the agents' willingness to accept the network. We study this novel type of Network Design problem by investigating the creation of $(\beta,\gamma)$-networks, that are in $\beta$-approximate Nash equilibrium and have a total cost of at most $\gamma$ times the optimal cost, for the recently proposed Euclidean Generalized Network Creation Game by Bil`o et al. [SPAA 2019]. There, $n$ agents corresponding to points in Euclidean space create costly edges among themselves to optimize their centrality in the created network. Our main result is a simple $\mathcal{O}(n<sup>2)$-time</sup> algorithm that computes a $(\beta,\beta)$-network with low $\beta$ for any given set of points. Moreover, on integer grid point sets or random point sets our algorithm achieves a low constant $\beta$. Besides these results, we discuss a generalization of our algorithm to instances with arbitrary, even non-metric, edge lengths. Moreover, we show that no such positive results are possible when focusing on either optimal networks or perfectly stable networks as in both cases NP-hard problems arise, there exist instances with very unstable optimal networks, and there are instances for perfectly stable networks with high total cost. Along the way, we significantly improve several results from Bil`o et al. and we asymptotically resolve their conjecture about the Price of Anarchy by providing a tight bound.