Generalized Capacity Planning for the Hospital-Residents Problem

The Hospital Residents setting models important problems like school choice, assignment of undergraduate students to degree programs, among many others. In this setting, fixed quotas are associated with the programs that limit the number of agents that can be assigned to them. Motivated by scenarios where all agents must be matched, we propose and study a generalized capacity planning problem, which allows cost-controlled flexibility with respect to quotas. Our setting is an extension of the Hospital Resident setting where programs have the usual quota as well as an associated cost, indicating the cost of matching an agent beyond the initial quotas. We seek to compute a matching that matches all agents and is optimal with respect to preferences, and minimizes either a local or a global objective on cost. We show that there is a sharp contrast -- minimizing the local objective is polynomial-time solvable, whereas minimizing the global objective is NP-hard. On the positive side, we present approximation algorithms for the global objective in the general case and a particular hard case. We achieve the approximation guarantee for the special hard case via a linear programming based algorithm. We strengthen the NP-hardness by showing a matching lower bound to our algorithmic result.