Value-based Resource Matching with Fairness Criteria: Application to Agricultural Water Trading

Abstract

Optimal allocation of agricultural water in the event of droughts is an important global problem. In addressing this problem, many aspects, including the welfare of farmers, the economy, and the environment, must be considered. Under this backdrop, our work focuses on several resource-matching problems accounting for agents with multi-crop portfolios, geographic constraints, and fairness. First, we address a matching problem where the goal is to maximize a welfare function in two-sided markets where buyers' requirements and sellers' supplies are represented by value functions that assign prices (or costs) to specified volumes of water. For the setting where the value functions satisfy certain monotonicity properties, we present an efficient algorithm that maximizes a social welfare function. When there are minimum water requirement constraints, we present a randomized algorithm which ensures that the constraints are satisfied in expectation. For a single seller--multiple buyers setting with fairness constraints, we design an efficient algorithm that maximizes the minimum level of satisfaction of any buyer. We also present computational complexity results that highlight the limits on the generalizability of our results. We evaluate the algorithms developed in our work with experiments on both real-world and synthetic data sets with respect to drought severity, value functions, and seniority of agents.