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Transparency and Control in Platforms for Networked Markets

Pang, John and Lin, Weixuan and Fu, Hu and Kleeman, Jack and Bitar, Eilyan and Wierman, Adam (2019) Transparency and Control in Platforms for Networked Markets. . (Unpublished)

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In this work, we analyze the worst case efficiency loss of online platform designs under a networked Cournot competition model. Inspired by some of the largest platforms today, the platform designs considered tradeoffs between transparency and control, namely, (i) open access, (ii) controlled allocation and (iii) discriminatory access. 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 seek a balance between transparency and control, and achieve the best of both worlds, maintaining high participation rates while limiting efficiency loss. We also study a model of consumer search cost which further distinguishes between the three designs.

Item Type:Report or Paper (Discussion Paper)
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URLURL TypeDescription Paper
Pang, John0000-0002-6485-7922
Record Number:CaltechAUTHORS:20190626-105727708
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:96735
Deposited By: Tony Diaz
Deposited On:26 Jun 2019 18:08
Last Modified:09 Mar 2020 13:19

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