Online Stochastic Allocation with Increasing Returns
We study online allocation with increasing returns, where an uncertain number of customers arrive sequentially and can be irrevocably assigned to any product with remaining capacity. Each assignment earns a base reward plus a bonus that is nondecreasing in the number of previous assignments to the same product. Prior work has focused primarily on fixed or diminishing returns. Under increasing returns, the central challenge is that concentrating assignments can unlock large future rewards, while a different product may be preferable if arrivals stop early. We show that classical approaches, including greedy and natural LP-based rounding algorithms, can perform arbitrarily poorly, even with homogeneous bonuses. We evaluate performance through competitive ratios relative to the hindsight offline optimum. For homogeneous bonuses, we establish a tight competitive ratio of $1/2$. For arbitrary heterogeneous bonuses, however, no online algorithm can guarantee a competitive ratio greater than $1/m$, where $m$ is the number of products. By imposing discrete concavity on the bonus functions, we limit the concentration of rewards in later assignments and restore constant guarantees. Under this structure, we develop a re-solving framework that repeatedly selects a planning horizon, constructs a feasible allocation plan from the current state, and executes its assignments in a specific order. For arbitrary arrival distributions, we design distribution-oblivious deterministic and randomized algorithms with competitive ratios of $0.2537$ and $0.3864$, respectively. For known increasing-failure-rate (IFR) arrival distributions, we exploit distributional information to obtain a deterministic $1/2$-competitive algorithm.