Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230493
Authors: 
Aoyagi, Masaki
Year of Publication: 
2020
Series/Report no.: 
ISER Discussion Paper No. 1089
Abstract: 
This paper studies the problem of a monopolistic platform which offers agents connection with one another. Agents have heterogeneous characteristics that are valued by some other agents and observed privately by the principal. The agents are privately informed about their heterogeneous preferences over the characteristics of the other agents. The platform solicits information from the agents about their preferences and then offers an allocation that consists of groups of connected agents and subscription fees. We study mechanisms which induce truthful reporting and acceptance of the proposed allocation as a unique equilibrium outcome. We identify asymptotically optimal mechanisms which fully extract the agents' informational rents in the limit as the market becomes large.
Subjects: 
platform
network externalities
random graph
revenue maximization
strategy-proof
JEL: 
D42
D47
D62
D82
L12
Document Type: 
Working Paper

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