Abstract
Motivated by online platforms such as Amazon, Airbnb, etc.; we consider the following Bertrand game model of product placement: a number of sellers (e.g.; apartment owners) are interested in placing their products on a platform's (e.g.; Airbnb.com) website. We assume that the price of a product is determined by the the number of available sellers and their qualities, and the probability with which a platform user will buy a product is a function of the prices and the qualities, according to a multinomial logit model. In other words, the outcomes, i.e.; the realized prices and sales, are determined by the Nash equilibrium of a Bertrand game. The platform can affect the outcome of the game by deciding on a mechanism to determine which products to display on their websites. For such a Bertrand game, we derive optimal mechanisms for the platform to maximize either social welfare or revenue.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 259-261 |
| Number of pages | 3 |
| Journal | IFAC-PapersOnLine |
| Volume | 52 |
| Issue number | 20 |
| DOIs | |
| State | Published - 2019 |
| Event | 8th IFAC Workshop on Distributed Estimation and Control in Networked Systems, NECSYS 2019 - Chicago, United States Duration: Sep 16 2019 → Sep 17 2019 |
Keywords
- Display Control
- Game Theory
- Online Platforms
- Operations Research
- Two-Sided Market
ASJC Scopus subject areas
- Control and Systems Engineering