Abstract
Increasingly in both traditional, and especially Internet-based marketplaces, knowledge is becoming a traded commodity. This paper considers the impact of the presence of knowledge- brokers, or experts, on search-based markets with noisy signals. For example, consider a consumer looking for a used car on a large Internet marketplace. She sees noisy signals of the true value of any car she looks at the advertisement for, and can disambiguate this signal by paying for the ser-vices of an expert (for example, getting a Carfax report, or taking the car to a mechanic for an inspection). Both the consumer and the expert are rational, self-interested agents. We present a model for such search environments, and analyze several aspects of the model, making three main contributions: (1) We derive the consumer's optimal search strategy in environments with noisy signals, with and without the option of consulting an expert; (2) We find the optimal strategy for maximizing the expert's profit; (3) We study the option of market designers to subsidize search in a way that improves overall social welfare. We illustrate our results in the context of a plausible distribution of signals and values. Categories and Subject Descriptors J.4 [Social and Behavioral Sciences]: Economics General Terms Algorithms, Economics.
Original language | English |
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Pages | 385-392 |
Number of pages | 8 |
State | Published - 2011 |
Event | 10th International Conference on Autonomous Agents and Multiagent Systems 2011, AAMAS 2011 - Taipei, Taiwan, Province of China Duration: 2 May 2011 → 6 May 2011 |
Conference
Conference | 10th International Conference on Autonomous Agents and Multiagent Systems 2011, AAMAS 2011 |
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Country/Territory | Taiwan, Province of China |
City | Taipei |
Period | 2/05/11 → 6/05/11 |
Keywords
- Economically-motived agents
- Modeling the dynamics of MAS