Two approaches for fair resource allocation

Fairness has become one of the primary concerns in several Operational Research (OR) problems, especially in resource allocation problems. It is crucial to ensure a fair distribution of the resources across the entities so that the proposed solutions will be both applicable and acceptable. In many real-life systems, the most e cient solution will not be the most fair solution, which creates a trade-o between e ciency and fairness. We propose two approaches in order to help the decision makers (DM) to nd an e cient solution which take fairness of the distribution of resources into account. First approach we propose is optimizing a speci c subset of the set of Schur-concave functions, namely ordered weighted averaging (OWA) functions, which are able to re ect both e ciency and fairness concerns. We do not assume that the weights of the DM to be used in OWA functions are readily available. We explore a wide range of weight vectors and report results for these di erent choices of weights. We illustrate the approach using a workload allocation problem and a knapsack problem and visualize the trade-o between fairness and e ciency. In some applications, the DM may provide a reference point such that the aim would be nding an e cient solution which is more preferable than this reference in terms of fairness. For such cases we propose a second approach that maximizes e ciency while controlling fairness concerns via a constraint. Similar to the rst approach, fairness concerns are re ected using OWA function forms. However, the resulting formulation yields to non-linearity. Thus, a hybrid interactive algorithm is presented that tackles this nonlinearity using an enumerative approach. The algorithm nds an e cient solution which OWA dominates the reference point by interacting with the DM. The algorithm is tested on knapsack problems and shows successful performance.