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Published May 2017 | metadata_only
Book Section - Chapter

The efficiency of open access in platforms for networked cournot markets


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.

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.

Additional details

August 19, 2023
August 19, 2023