A Regulated Oligopoly Multi-Market Model for Trading Smart Data

Abstract-We present a price competition model for the trading of data products. Standard results suggest that under full competition the equilibrium only exists when all sellers have zero profit. We introduce a regulator which can also be thought of as the sellers forming a coalition/association, whose role is to enable money transfer based on partial observations of the sellers' actions. We show that by proper design of the transfer mechanism, efficient equilibrium (profit-maximizing or profit-positive) can be achieved, thereby providing an alternative to other competitionvoiding mechanisms such as product differentiation and market split