Related papers: Greater search cost reduces prices
This work addresses the buyer's inspection paradox for information markets. The paradox is that buyers need to access information to determine its value, while sellers need to limit access to prevent theft. To study this, we introduce an…
A common phenomena in modern recommendation systems is the use of feedback from one user to infer the `value' of an item to other users. This results in an exploration vs. exploitation trade-off, in which items of possibly low value have to…
We consider an environment where sellers compete over buyers. All sellers are a-priori identical and strategically signal buyers about the product they sell. In a setting motivated by on-line advertising in display ad exchanges, where firms…
Selling a single item to $n$ self-interested buyers is a fundamental problem in economics, where the two objectives typically considered are welfare maximization and revenue maximization. Since the optimal mechanisms are often impractical…
In financial markets valuable information is rarely circulated homogeneously, because of time required for information to spread. However, advances in communication technology means that the 'lifetime' of important information is typically…
A principal with cheap capital optimally forces her counterparty to borrow at above-market rates. The reason: the form of finance is a screening device. Advances provide liquidity but pool types; contingent transfers separate types, but,…
We study the price-setting problem of market makers under risk neutrality and perfect competition in continuous time. Thereby we follow the classic Glosten-Milgrom model that defines bid and ask prices as expectations of a true value of the…
There is a growing body of work on sorting and selection in models other than the unit-cost comparison model. This work is the first treatment of a natural stochastic variant of the problem where the cost of comparing two elements is a…
We empirically study the interplay between exploration and competition. Systems that learn from interactions with users often engage in exploration: making potentially suboptimal decisions in order to acquire new information for future…
Many important economic outcomes result from the combined effects of several choices, so the best option is not determined from each choice in isolation, but depends on how each choice alters total outcomes. We formally show that narrow…
To choose between two discrete goods, a consumer pays attention to only those with prices below a threshold. From these, she chooses her most preferred good. We assume consumers in a population have the same preference but may have…
A defining feature of digital goods is that replication and degradation are costless: once a high-quality good is produced, low-quality versions can be created and distributed at no additional cost. This paper studies quality-based…
We consider job scheduling settings, with multiple machines, where jobs arrive online and choose a machine selfishly so as to minimize their cost. Our objective is the classic makespan minimization objective, which corresponds to the…
Information foraging connects optimal foraging theory in ecology with how humans search for information. The theory suggests that, following an information scent, the information seeker must optimize the tradeoff between exploration by…
This paper investigates what properties a neighbourhood requires to support beneficial local search. We show that neighbourhood locality, and a reduction in cost probability towards the optimum, support a proof that search among neighbours…
We address the problem of improving bidders' strategies in prior-dependent revenue-maximizing auctions and introduce a simple and generic method to design novel bidding strategies if the seller uses past bids to optimize her mechanism. We…
We consider a nonlinear pricing environment with private information. We provide profit guarantees (and associated mechanisms) that the seller can achieve across all possible distributions of willingness to pay of the buyers. With a…
Online advertising banners are sold in real-time through auctions.Typically, the more banners a user is shown, the smaller the marginalvalue of the next banner for this user is. This fact can be detected bybasic ML models, that can be used…
A monopolist wants to sell one item per period to a consumer with evolving and persistent private information. The seller sets a price each period depending on the history so far, but cannot commit to future prices. We show that, regardless…
A platform charges a producer for disclosing quality evidence to consumers before trade. It aims to maximize its revenue guarantee across potentially multiple equilibria which arise from the interdependence of producer purchase decisions…