Transparency and Control in Platforms for Networked Markets
Abstract
In this paper, we analyze the worst case efficiency loss of online platform designs under a networked Cournot competition model. Inspired by some of the largest platforms in operation today, the platform designs that we consider examine the trade-off between transparency and control. Our results show that open access designs incentivize increased production towards perfectly competitive levels and limit efficiency loss, while controlled allocation designs lead to producer-platform incentive misalignment, resulting in low participation and unbounded efficiency loss. We also show that discriminatory access designs balance transparency and control, achieving the best of both worlds by maintaining high participation rates while limiting efficiency loss.
Keywords
Cite
@article{arxiv.1903.04574,
title = {Transparency and Control in Platforms for Networked Markets},
author = {John Pang and Weixuan Lin and Hu Fu and Jack Kleeman and Eilyan Bitar and Adam Wierman},
journal= {arXiv preprint arXiv:1903.04574},
year = {2020}
}
Comments
55 pages, 1 figures