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Networked Cournot Competition in Platform Markets: Access Control and Efficiency Loss

Lin, Weixuan and Pang, John Z. F. and Bitar, Eilyan and Wierman, Adam (2017) Networked Cournot Competition in Platform Markets: Access Control and Efficiency Loss. In: 2017 IEEE 56th Annual Conference on Decision and Control (CDC). IEEE , Piscataway, NJ, pp. 4606-4611. ISBN 978-1-5090-2874-0. http://resolver.caltech.edu/CaltechAUTHORS:20180126-083709835

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Abstract

This paper studies network design and efficiency loss in online platforms using the model of networked Cournot competition. We consider two styles of platforms: open access platforms and discriminatory access platforms. In open access platforms, every firm can connect to every market, while discriminatory access platforms limit connections between firms and markets in order to improve social welfare. Our results provide tight bounds on the efficiency loss of both open access and discriminatory access platforms. For open access platforms, we show that the efficiency loss at a Nash equilibrium is upper bounded by 3/2. In the case of discriminatory access platforms, we prove that, under an assumption on the linearity of cost functions, a greedy algorithm for optimizing network connections can guarantee the efficiency loss at a Nash equilibrium is upper bounded by 4/3.


Item Type:Book Section
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1109/CDC.2017.8264340DOIArticle
http://ieeexplore.ieee.org/document/8264340/PublisherArticle
Additional Information:© 2017 IEEE. Date Added to IEEE Xplore: 23 January 2018. This work has received support from the NSF through AitF-1637598, CNS-1518941, CPS-154471, ECCS-1351621, and IIP-1632124. The collaboration began while the authors were visiting the Simons Institute for the Theory of Computing.
Funders:
Funding AgencyGrant Number
NSFCCF-1637598
NSFCNS-1518941
NSFCPS-154471
NSFECCS-1351621
NSFIIP-1632124
Record Number:CaltechAUTHORS:20180126-083709835
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20180126-083709835
Official Citation:W. Lin, J. Z. F. Pang, E. Bitar and A. Wierman, "Networked cournot competition in platform markets: Access control and efficiency loss," 2017 IEEE 56th Annual Conference on Decision and Control (CDC), Melbourne, Australia, 2017, pp. 4606-4611. doi: 10.1109/CDC.2017.8264340
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:84540
Collection:CaltechAUTHORS
Deposited By: Ruth Sustaita
Deposited On:31 Jan 2018 00:42
Last Modified:31 Jan 2018 00:42

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