XOS Valuation
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A
set function In mathematics, especially measure theory, a set function is a function whose domain is a family of subsets of some given set and that (usually) takes its values in the extended real number line \R \cup \, which consists of the real numbers \R ...
is called fractionally subadditive, or XOS (not to be confused with OXS), if it is the maximum of several non-negative
additive set function In mathematics, an additive set function is a function \mu mapping sets to numbers, with the property that its value on a union of two disjoint sets equals the sum of its values on these sets, namely, \mu(A \cup B) = \mu(A) + \mu(B). If this ad ...
s. This valuation class was defined, and termed XOS, by Noam Nisan, in the context of
combinatorial auction A combinatorial auction is a type of smart market in which participants can place bids on combinations of discrete heterogeneous items, or “packages”, rather than individual items or continuous quantities. These packages can be also called lot ...
s. The term fractionally subadditive was given by Uriel Feige.


Definition

There is a finite base set of items, M := \. There is a function v which assigns a number to each subset of M. The function v is called ''fractionally subadditive'' (or XOS) if there exists a collection of set functions, \, such that: * Each a_j is additive, ''i.e.'', it assigns to each subset X\subseteq M, the sum of the values of the items in X. * The function v is the
pointwise maximum In mathematics, the lower envelope or pointwise minimum of a finite set of functions is the pointwise minimum of the functions, the function whose value at every point is the minimum of the values of the functions in the given set. The concept of ...
of the functions a_j. I.e, for every subset X\subseteq M: :v(X) = \max_^l a_j(X)


Equivalent Definition

The name fractionally subadditive comes from the following equivalent definition when restricted to non-negative additive functions: a set function v is ''fractionally subadditive'' if, for any S\subseteq M and any collection \_^k with \alpha_i > 0 and T_i\subseteq M such that \sum_ \alpha_i \ge 1 for all j\in S, we have v(S) \le \sum_^k \alpha_i v(T_i) .


Relation to other utility functions

Every
submodular set function In mathematics, a submodular set function (also known as a submodular function) is a set function that, informally, describes the relationship between a set of inputs and an output, where adding more of one input has a decreasing additional benefi ...
is XOS, and every XOS function is a
subadditive set function In mathematics, a subadditive set function is a set function whose value, informally, has the property that the value of function on the union of two sets is at most the sum of values of the function on each of the sets. This is thematically related ...
. See also:
Utility functions on indivisible goods Some branches of economics and game theory deal with indivisible goods, discrete items that can be traded only as a whole. For example, in combinatorial auctions there is a finite set of items, and every agent can buy a subset of the items, but an i ...
.


References

{{reflist Utility function types