The seller of an asset has the option to buy hard information about the value of the asset from an intermediary. The seller can then disclose the acquired information before selling the asset in a competitive market. We study how the intermediary designs and sells hard information to robustly maximize her revenue across all equilibria. Even though the intermediary could use an accurate test that reveals the asset's value, we show that robust revenue maximization leads to a noisy test with a continuum of possible scores that are distributed exponentially. In addition, the intermediary always charges the seller for disclosing the test score to the market, but not necessarily for running the test. This enables the intermediary to robustly appropriate a significant share of the surplus resulting from the asset sale even though the information generated by the test provides no social value.
When selling information products, the seller can provide some free partial information to change people's valuations so that the overall revenue can possibly be increased. We study the general problem of advertising information products by revealing partial information. We consider buyers who are decision-makers. The outcomes of the decision problems depend on the state of the world that is unknown to the buyers. The buyers can make their own observations and thus can hold different personal beliefs about the state of the world. There is an information seller who has access to the state of th…
A seller with one unit of a good faces N\geq3 buyers and a single competitor who sells one other identical unit in a second-price auction with a reserve price. Buyers who do not get the seller's good will compete in the competitor's subsequent auction. We characterize the optimal mechanism for the seller in this setting. The first-order approach typically fails, so we develop new techniques. The optimal mechanism features transfers from buyers with the two highest valuations, allocation to the buyer with the second-highest valuation, and a withholding rule that depends on the highest two or th…
Information is replicable in that it can be simultaneously consumed and sold to others. We study how resale affects a decentralized market for information. We show that even if the initial seller is an informational monopolist, she captures non-trivial rents from at most a single buyer: her payoffs converge to 0 as soon as a single buyer has bought information. By contrast, if the seller can also sell valueless tokens, there exists a ``prepay equilibrium'' where payment is extracted from all buyers before the information good is released. By exploiting resale possibilities, this prepay equilib…
A seller chooses a reserve price in a second-price auction to maximize worst-case expected revenue when she knows only the mean of value distribution and an upper bound on either values themselves or variance. Values are private and iid. Using an indirect technique, we prove that it is always optimal to set the reserve price to the seller's own valuation. However, the maxmin reserve price may not be unique. If the number of bidders is sufficiently high, all prices below the seller's valuation, including zero, are also optimal. A second-price auction with the reserve equal to seller's value (or…
University of Electronic Science and Technology of China（中国电子科技大学）；ShanghaiTech University（上海科技大学）
In an economic market, sellers, infomediaries and customers constitute an economic network. Each seller has her own customer group and the seller's private customers are unobservable to other sellers. Therefore, a seller can only sell commodities among her own customers unless other sellers or infomediaries share her sale information to their customer groups. However, a seller is not incentivized to share others' sale information by default, which leads to inefficient resource allocation and limited revenue for the sale. To tackle this problem, we develop a novel mechanism called customer shar…
Online platforms, such as Airbnb, hotels.com, Amazon, Uber and Lyft, can control and optimize many aspects of product search to improve the efficiency of marketplaces. Here we focus on a common model, called the discriminatory control model, where the platform chooses to display a subset of sellers who sell products at prices determined by the market and a buyer is interested in buying a single product from one of the sellers. Under the commonly-used model for single product selection by a buyer, called the multinomial logit model, and the Bertrand game model for competition among sellers, we …
Sellers in online markets face the challenge of determining the right time to sell in view of uncertain future offers. Classical stopping theory assumes that sellers have full knowledge of the value distributions, and leverage this knowledge to determine stopping rules that maximize expected welfare. In practice, however, stopping rules must often be determined under partial information, based on scarce data or expert predictions. Consider a seller that has one item for sale and receives successive offers drawn from some value distributions. The decision on whether or not to accept an offer is…
We study the problem of repeatedly auctioning off an item to one of $k$ bidders where: a) bidders have a per-round individual rationality constraint, b) bidders may leave the mechanism at any point, and c) the bidders' valuations are adversarially chosen (the prior-free setting). Without these constraints, the auctioneer can run a second-price auction to "sell the business" and receive the second highest total value for the entire stream of items. We show that under these constraints, the auctioneer can attain a constant fraction of the "sell the business" benchmark, but no more than $2/e$ of …
We propose a dynamical model of price formation on a spatial market where sellers and buyers are placed on the nodes of a graph, and the distribution of the buyers depends on the positions and prices of the sellers. We find that, depending on the positions of the sellers and on the level of information available, the price dynamics of our model can either converge to fixed prices, or produce cycles of different amplitudes and periods. We show how to measure the strength of competition in a spatial network by extracting the exponent of the scaling of the prices with the size of the system. As a…
