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The efficiency of open access in platforms for networked cournot markets

Pang, John Z. F. and Fu, Hu and Lee, Won I. and Wierman, Adam (2017) The efficiency of open access in platforms for networked cournot markets. In: IEEE INFOCOM 2017 - IEEE Conference on Computer Communications. IEEE , Piscataway, NJ, pp. 1-9. ISBN 978-1-5090-5336-0.

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This paper studies how the efficiency of an online platform is impacted by the degree to which access of platform participants is open or controlled. The study is motivated by an emerging trend within platforms to impose increasingly finegrained control over the options available to platform participants. While early online platforms allowed open access, e.g., Ebay allows any seller to interact with any buyer; modern platforms often impose matches directly, e.g., Uber directly matches drivers to riders. This control is performed with the goal of achieving more efficient market outcomes. However, the results in this paper highlight that imposing matches may create new strategic incentives that lead to increased inefficiency. In particular, in the context of networked Cournot competition, we prove that open access platforms guarantee social welfare within 7/16 of the optimal; whereas controlled allocation platforms can have social welfare unboundedly worse than optimal.

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Pang, John Z. F.0000-0002-6485-7922
Additional Information:© 2017 IEEE. Date of Conference: 1-4 May 2017. Date Added to IEEE Xplore: 05 October 2017. This work is supported by grants from NSF AitF-1637598, CNS-1518941, CPS-154471 and the Ronald & Maxine Linde Institute of Economic and Management Science at Caltech.
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Linde Institute of Economic and Management ScienceUNSPECIFIED
Record Number:CaltechAUTHORS:20171012-094453409
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Official Citation:J. Z. F. Pang, H. Fu, W. I. Lee and A. Wierman, "The efficiency of open access in platforms for networked cournot markets," IEEE INFOCOM 2017 - IEEE Conference on Computer Communications, Atlanta, GA, USA, 2017, pp. 1-9. doi: 10.1109/INFOCOM.2017.8057125
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:82305
Deposited By: Ruth Sustaita
Deposited On:12 Oct 2017 22:42
Last Modified:09 Jul 2020 22:23

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