Abstract
Intermediaries refer to agents that facilitate the resource allocation under certain constrain conditions. In a distribution market, buyers and sellers often interact via intermediaries and pay commissions to them. Due to the inadequacy of information spreading, a commodity can only be allocated to some agent who is close to the seller, which not only decreases the economic efficiency but also limits the seller's revenue. To tackle these two problems simultaneously, which is commonly a difficult objective in multi-agent systems, we use mechanism design theory and graph algorithms to develop a new auction protocol called Multi-Level Diffusion Mechanism (MLDM). Even when there are costs for assisting in others' trades, this mechanism can encourage every intermediary to help spread the selling information, either or not she has personal preference of the commodity. We show MLDM performs better than the second price auction both in theory and in numerical simulation no matter how agents' valuations and commissions are distributed.
Highlights
Distribution is the process of providing services or goods to consumers in need
Proof: Firstly, we show that Multi-Level Diffusion Mechanism (MLDM) is individually rational
We showed that the information diffusion mechanism proposed in [8] works when all agents, including all buyers and all intermediaries, form a tree
Summary
Distribution is the process of providing services or goods to consumers in need. This can be done directly by the service providers or, more commonly, by indirect channels with middlemen or distributors. We try to design a new commission system so as to incentivize the intermediaries to help spread the sale information, through which the item can be allocated in a global sense. A distribution mechanism so as to incentivize information diffusion, and increase both the seller’s revenue and the allocation efficiency, which are generally two conflicting objectives in mechanism design [1], [2]. Because of the interweaving of buyers’ private valuations, trading commissions, and information diffusion, as far as we know, all the existing techniques are invalid and it is very demanding to design good mechanisms for the distribution market. The mechanism can incentivize information diffusion and the seller’s revenue and the allocation efficiency are improved comparing to the second price auction.
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
