Approximating Optimal Welfare in Complementary Allocation under Decentralized Information

Abstract

Complementary resources are often allocated by agencies that see different coordinates of an individual's needs. If an intervention requires complementary resources, an agency may know if said person lacks its own resource; yet not know if supplying completes a useful bundle. We study allocation of $m$ divisible complementary goods when each agency observes only its own coordinate of a baseline-access profile. To isolate information from incentives, we measure the welfare cost of this split against a generous decentralized benchmark DEC: the best rule that acts on local information alone, with cooperative agencies and known population distribution and capacities. Even so, local observation alone can make optimally coordinated policies arbitrarily inefficient: a factor linear in $m$ (even with equal capacities), and a factor inverse in OPT (with but three agencies). Threshold referrals recover much of this loss: an agency reports if its value lies below a public threshold, and a clearing rule uses only the joint reports. Aggregating types by their reports captures a rectangle under the optimal half-utility survival curve. Our main tool is a profile-level charging certificate: if optimal utility is at least twice a threshold, OPT pays at least that on every deficient coordinate. This yields welfare at least ${\rm OPT}/[4(1+\ln(2/{\rm OPT}))]$ with one bit per agency; and an equal-revenue family shows this log-loss tight for one threshold. A geometric threshold ladder improves this to a constant fraction of OPT with doubly-logarithmic messages: a staircase recovers ${\rm OPT}/8$ with $Θ(\log\log(1/{\rm OPT}))$ bits, and this is necessary within the class. The results isolate how a simple reporting language turns large local-info losses into constant-factor recovery. In short: One threshold gets a log-approximation. A staircase, with log-of-log bits, a constant-factor.