Serving by local consensus in the public service location game

We discuss the issue of distributed and cooperative decision-making in a network game of public service location. Each node of the network can decide to host a certain public service incurring in a construction cost and serving all the neighboring nodes and itself. A pure consumer node has to pay a tax, and the collected tax is evenly distributed to all the hosting nodes to remedy their construction costs. If all nodes make individual best-response decisions, the system gets trapped in an inefficient situation of high tax level. Here we introduce a decentralized local-consensus selection mechanism which requires nodes to recommend their neighbors of highest local impact as candidate servers, and a node may become a server only if all its non-server neighbors give their assent. We demonstrate that although this mechanism involves only information exchange among neighboring nodes, it leads to socially efficient solutions with tax level approaching the lowest possible value. Our results may help in understanding and improving collective problem-solving in various networked social and robotic systems.