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Published September 2017 | Published
Journal Article Open

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


This paper studies network design and efficiency loss in open and discriminatory access platforms under networked Cournot competition. In open platforms, every firm connects to every market, while discriminatory platforms limit connections between firms and markets to improve social welfare. We provide tight bounds on the efficiency loss of both platforms; (i) that the efficiency loss at a Nash equilibrium under open access is bounded by 3/2, and (ii) for discriminatory access platforms, we provide a greedy algorithm for optimizing network connections that guarantees efficiency loss at a Nash equilibrium is bounded by 4/3, under an assumption on the linearity of cost functions.

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August 19, 2023
August 19, 2023