Mean Field Equilibria of Pricing Games in Internet Marketplaces Conference Paper uri icon

abstract

  • We model an Internet marketplace using a set of servers that choose prices for performing jobs. Each server has a queue of unfinished jobs, and is penalized for delay by the market maker via a holding cost. A server completes jobs with a low or high "quality", and jobs truthfully report the quality with which they were completed. The best estimate of qual-ity based on these reports is the "" of the server. A server bases its pricing decision on the distribution of its competitors offered prices and reputations. An entering job is given a random sample of servers, and chooses the best one based on a linear combination of price and reputation. We seek to understand how prices would be determined in such a marketplace using the theory of Mean Field Games. We show the existence of a Mean Field Equilibrium and show how reputation plays a role in allowing servers to de- clare larger prices than their competitors. We illustrate our results by a numerical study of the system via simulation with parameters chosen from data gathered from existing Internet marketplaces. c 2016 Copyright held by the owner/author(s).ACM.

author list (cited authors)

  • Raja, V. R., Ramaswamy, V., Shakkottai, S., & Subramanian, V.

complete list of authors

  • Reddyvari Raja, Vamseedhar||Ramaswamy, Vinod||Shakkottai, Srinivas||Subramanian, Vijay

editor list (cited editors)

  • Alouf, S., Jean-Marie, A., Hegde, N., & Proutière, A.

publication date

  • January 1, 2016 11:11 AM

publisher

  • ACM  Publisher