Model of Multi-branch Trees for Efficient Resource Allocation

Abstract

Although exploring the principles of resource allocation is still important in many fields, little is known about appropriate methods for optimal resource allocation thus far. This is because we should consider many issues including opposing interests between many types of stakeholders. Here, we develop a new allocation method to resolve budget conflicts. To do so, we consider two points—minimizing assessment costs and satisfying allocational efficiency. In our method, an evaluator’s assessment is restricted to one’s own projects in one’s own department, and both an executive’s and mid-level executives’ assessments are also restricted to each representative project in each branch or department they manage. At the same time, we develop a calculation method to integrate such assessments by using a multi-branch tree structure, where a set of leaf nodes represents projects and a set of non-leaf nodes represents either directors or executives. Our method is incentive-compatible because no director has any incentive to make fallacious assessments.