Customer Sharing in Economic Networks with Costs
This addresses a specific problem in economic markets for sellers and customers, but it appears incremental as it builds on existing mechanism design concepts.
The paper tackles the problem of inefficient resource allocation and limited revenue in economic networks where sellers lack incentives to share sale information, by developing a customer sharing mechanism (CSM) that incentivizes sellers to share information and customers to participate truthfully, resulting in efficient commodity allocation and optimized seller revenue.
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 sharing mechanism (CSM) which incentivizes all sellers to share each other's sale information to their private customer groups. Furthermore, CSM also incentivizes all customers to truthfully participate in the sale. In the end, CSM not only allocates the commodities efficiently but also optimizes the seller's revenue.