Related papers: Price Regulation and Network Spillovers
Electricity market operators worldwide use mixed-integer linear programming to solve the allocation problem in wholesale electricity markets. Prices are typically determined based on the duals of relaxed versions of this optimization…
Personalization is pervasive in the online space as, when combined with learning, it leads to higher efficiency and revenue by allowing the most relevant content to be served to each user. However, recent studies suggest that such…
In the mobile communication services, users wish to subscribe to high quality service with a low price level, which leads to competition between mobile network operators (MNOs). The MNOs compete with each other by service prices after…
Global supply networks in agriculture, manufacturing, and services are a defining feature of the modern world. The efficiency and the distribution of surpluses across different parts of these networks depend on choices of intermediaries.…
Regulators and academics are increasingly interested in the causal effect that algorithmic actions of a digital platform have on consumption. We introduce a general causal inference problem we call the steerability of consumption that…
I characterize the consumer-optimal market segmentation in competitive markets where multiple firms selling differentiated products to consumers with unit demand. This segmentation is public---in that each firm observes the same market…
Pharmaceutical markets for life-saving therapies combine monopoly power with insurance coverage. We build a tractable sequential game in which a patent-holder chooses the drug price, a profit-maximising insurer sets its premium, and a…
Algorithmic price collusion facilitated by artificial intelligence (AI) algorithms raises significant concerns. We examine how AI agents using Q-learning engage in tacit collusion in two-sided markets. Our experiments reveal that AI-driven…
This paper models a non-cooperative game between two EV charging stations. One is a fixed-power charging station purchasing electricity from the grid at wholesale price and reselling the energy to EV owners at a higher retail price; the…
We investigate the design of pricing policies that enhance driver adherence to route guidance, ensuring effective routing control. The major novelty lies in that we adopt a Markov chain to model drivers' compliance rates conditioned on both…
The modernization of the power system introduces technologies that may improve the system's efficiency by enhancing the capabilities of users. Despite their potential benefits, such technologies can have a negative impact. This subject has…
Some consumers, particularly households, are unwilling to face volatile electricity prices, and they can perceive as unfair price differentiation in the same local area. For these reasons, nodal prices in distribution networks are rarely…
In many shopping scenarios, e.g., in online shopping, customers have a large menu of options to choose from. However, most of the buyers do not browse all the options and make decision after considering only a small part of the menu. To…
We study undominated mechanisms with transfers for regulating a monopolist who privately observes the marginal cost of production. We show that in any undominated mechanism, there is a quantity floor, which depends only on the primitives,…
As is well known, many classes of markets have efficient equilibria, but this depends on agents being non-strategic, i.e. that they declare their true demands when offered goods at particular prices, or in other words, that they are…
We consider a simple model for the evolution of a limit order book in which limit orders of unit size arrive according to independent Poisson processes. The frequencies of buy limit orders below a given price level, respectively sell limit…
Consumers value keeping some information about them private from potential marketers. E-commerce dramatically increases the potential for marketers to accumulate otherwise private information about potential customers. Online marketers…
When the traded energy and reserve products between zones are co-allocated to optimize the infrastructure usage, both deterministic and stochastic flows have to be accounted for on interconnector lines. We focus on allocation models, which…
In this paper, we study third-degree price discrimination in a model first presented by Bergemann, Brooks, and Morris [2015]. Since such price discrimination might create market segments with vastly different posted prices, we consider…
We propose a pseudo-market solution to resource allocation problems subject to constraints. Our treatment of constraints is general: including bihierarchical constraints due to considerations of diversity in school choice, or scheduling in…