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Consider a directed graph $G = (V, E)$ with a source $s \in V$ and sink $t \in V$. From $G$, I can define a monotone Boolean function $\phi_G$ on the set of variables $E$, in the following way: every path $\pi$ from $s$ to $t$ gives a clause where we conjoin all edges of $\pi$, and $\phi_G$ is the disjunction of all these clauses. (It is obvious that it suffices to only consider simple paths: any path containing a vertex multiple times must use a set of edges that is not minimal under inclusion, so it defines a clause which is absorbed by another.)

If $G$ is required to be an acyclic graph, then I can easily construct in linear time from $G$ a representation of $\phi_G$ as a monotone Boolean circuit (using operators $\lor$ and $\land$). Specifically, every node of $G$ gives a gate of the circuit, which is the constant-1 gate for $t$, and which is otherwise the disjunction, over all outgoing edges $e$, of the conjunction of the variable corresponding to $e$, and of the gate for the end vertex of $e$. (Incidentally, the functions $\phi_G$ for $G$ an acyclic graph do not seem to achieve all possible monotone Boolean functions, and I don't know what is the precise class of functions that are achieved.)

My question is: for a general (non-acyclic) graph $G$, can I also construct in linear time a representation of $\phi_G$ as a monotone Boolean circuit? (or even as a non-monotone Boolean circuit?) I know it can be done in quadratic time, intuitively by making $G$ acyclic by creating $n$ copies of it. But I don't know how to do it in linear time in this case. I suspect it is impossible (and that it could be shown on specific graph classes, e.g., grid graphs), but I don't know how to show it. Are there any relevant circuit lower bounds that could help here?

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I still do not have any ideas about the general answer to this question, but I think I have an argument against the possibility to construct such a circuit in so-called monotone "decomposable negation normal form" or monotone DNNF. This is a circuit with no negations where, for every AND-gate, the inputs do not "depend" on any common variable, i.e., there is no variable $x$ having a path to two different inputs of an AND-gate: see this paper for the formal definition.

A monotone DNNF $C$ for $\phi_G$ can be used to compute the shortest path from $s$ to $t$ under any weighting of $G$ (with positive or negative weights), if we interpret $C$ in the tropical semiring: simply replace every variable by the weight of the corresponding edge, interpret AND-gates as a plus, and interpret OR-gates as a max, then the result is the smallest possible weight of a path. (The fact that the circuit is a DNNF is intuitively used to ensure that we do not add a gate with itself.)

Thus, if we could compute in linear time a monotone DNNF for $\phi_G$, then we could compute the shortest path from $s$ to $t$ in linear time. This would be better than the running time of the Bellman-Ford algorithm. This is suspicious, given that it is known to be optimal when using Min and Sum operations: see this paper.

I do not know, however, if this argument can extend to a lower bound on arbitrary circuits. It seems intuitively implausible that we can make the circuit smaller by conjoining a variable with itself (i.e., using the fact that "x AND x = x" in the Boolean semiring), but I do not know how to prove it.

Edit: another item of related work: in this paper the Boolean function in question is called the "st-connectivity function" (on multigraphs). They mention a result that the function can be represented by a read-once formula precisely for two-terminal series-parallel graphs, but they don't seem to study size bounds.

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