The efficiency of open access in platforms for networked cournot markets

Pang, John Z. F.; Fu, Hu; Lee, Won I.; Wierman, Adam

doi:10.1109/infocom.2017.8057125

Cited by 19 publications

(23 citation statements)

References 27 publications

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“…Our work builds on a growing literature studying networked Cournot competition, including [2,5,6,15]. While this literature is maturing, there are still a wide variety of important open questions that remain.…”

Section: Discussionmentioning

confidence: 99%

“…A large swath of literature on networked Cournot competitions, e.g., [2,5], focuses on characterizing and computing Nash equilibria. Recent streams of literature that closely relate to our work are (i) characterizing the efficiency loss of networked Cournot games [11,15] and (ii) understanding the impacts of system operator governance on the resulting Nash equilibria [6]. This paper is the first to provide a tight bound on the efficiency loss of open access platforms, improving on the bounds in [15], and the first to provide an algorithm for network design with provable guarantees.…”

Section: Related Workmentioning

confidence: 98%

“…We describe competition in online platforms according to the networked Cournot competition model first introduced by [2] and [5], and later employed by [15] to describe competition in platforms.…”

Section: Model and Preliminariesmentioning

confidence: 99%

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Networked cournot competition in platform markets: Access control and efficiency loss

Lin

Pang

Bitar

et al. 2017

2017 IEEE 56th Annual Conference on Decision and Control (CDC)

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This paper studies network design and efficiency loss in open and discriminatory access platforms under networked Cournot competition. In open platforms, every firm connects to every market, while discriminatory platforms limit connections between firms and markets to improve social welfare. We provide tight bounds on the efficiency loss of both platforms; (i) that the efficiency loss at a Nash equilibrium under open access is bounded by 3/2, and (ii) for discriminatory access platforms, we provide a greedy algorithm for optimizing network connections that guarantees efficiency loss at a Nash equilibrium is bounded by 4/3, under an assumption on the linearity of cost functions.

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Section: Discussionmentioning

confidence: 99%

Section: Related Workmentioning

confidence: 98%

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Networked cournot competition in platform markets: Access control and efficiency loss

Lin

Pang

Bitar

et al. 2017

2017 IEEE 56th Annual Conference on Decision and Control (CDC)

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“…Bertrand competition, proposed by Joseph Bertrand in 1883, and Cournot competition, introduced in 1838 by Antoine Augustin Cournot, are fundamental economic models that represent sellers competing in a single market, and have been studied comprehensively in economics. Due to the motivation that many sellers compete in more than one market in modern dynamic and diverse economy, a recent and growing literature has studied Cournot competitions in network environments [1,7,27,32]. The work [1,7] focused on characterizing and computing Nash equilibria, and investigated the impact of changes in the (bipartite) network structure on seller's profit and buyer's surplus.…”

Section: Related Workmentioning

confidence: 99%

“…The work [1,7] focused on characterizing and computing Nash equilibria, and investigated the impact of changes in the (bipartite) network structure on seller's profit and buyer's surplus. [27] and [32] analyzed the efficiency loss of networked Cournot competition game via the metric of price of anarchy. While all these previous works focused on the objective of social welfare maximization in networked Cournot competition, we consider the objective of both social welfare and revenue maximization in the networked Bertrand competition, and also in the networked Cournot competition.…”

Section: Related Workmentioning

confidence: 99%

Optimal Search Segmentation Mechanisms for Online Platform Markets

Zheng

Srikant

2019

Web and Internet Economics

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Online platforms, such as Airbnb, hotels.com, Amazon, Uber and Lyft, can control and optimize many aspects of product search to improve the efficiency of marketplaces. Here we focus on a common model, called the discriminatory control model, where the platform chooses to display a subset of sellers who sell products at prices determined by the market and a buyer is interested in buying a single product from one of the sellers. Under the commonly-used model for single product selection by a buyer, called the multinomial logit model, and the Bertrand game model for competition among sellers, we show the following result: to maximize social welfare, the optimal strategy for the platform is to display all products; however, to maximize revenue, the optimal strategy is to only display a subset of the products whose qualities are above a certain threshold. We extend our results to Cournot competition model, and show that the optimal search segmentation mechanisms for both social welfare maximization and revenue maximization also have simple threshold structures. The threshold in each case depends on the quality of all products, the platform's objective and seller's competition model, and can be computed in linear time in the number of products.

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