Towards the Design of a Robust Incentive Mechanism for E-Marketplaces with Limited Inventory (Doctoral Consortium)

ABSTRACT In e-marketplaces, reputation systems are prevalently applied to assist buyers to model seller trustworthiness based on ratings shared by other buyers. However, dishonest buyers may share untruthful ratings. Many incentive mechanisms have been proposed to elicit truthful ratings from buyers. These mechanisms have a common implicit assumption that sellers can provide a large number of products. In reality, e-markets with limited inventory exist in many scenarios. For example, dentist booking in US, as a marketplace, has been observed the phenomenon that the service demand is much larger than the service supply, and the second-hand markets where some used and workable goods (e.g., second-hand textbooks) are often in short supply due to lower prices. We call a marketplace in which the demand outweighs the supply a marketplace with limited inventory. In such marketplaces, buyers may lose profit if they provide truthful ratings due to competition from other buyers for the limited products provided by trustworthy sellers. In other words, providing truthful ratings is costly. The existing incentive mechanisms seldom consider such cost imposed on providing truthful ratings, which motivates us to design a new incentive mechanism for e-marketplaces with limited inventory. Moreover, a general assumption for incentive mechanisms is that every agent is rational and has the belief that others are also rational. However, in a realistic scenario, some agents may be irrational (bounded rationality or adversary), which may impede the efficiency of the mechanisms. In all, the aim of our research is to design an incentive mechanism for e-marketplaces with limited inventory that is robust against irrational agents

An Incentive Mechanism to Promote Honesty in E-marketplaces with Limited Inventory

Part 2: Short PapersInternational audienceIn e-marketplaces with limited inventory where buyers’ demand is larger than sellers’ supply, promoting honesty raises new challenges: sellers may behave dishonestly because they can sell out all products without the necessity of gaining high reputation; buyers may provide untruthful ratings to mislead other buyers in order to have a higher chance to obtain the limited products. In this paper, we propose a novel incentive mechanism to promote buyer and seller honesty in such e-marketplaces. More specifically, our mechanism models both buyer and seller honesty. It offers higher prices to the products provided by honest sellers so that the sellers can gain larger utility. Honest buyers also have a higher chance to do business with honest sellers and are able to gain larger utility. Experimental results confirm that our mechanism promotes both buyer and seller honesty

Design of an incentive mechanism to promote honesty in e-marketplaces with limited inventory

In e-marketplaces with limited inventory where buyers' demand is larger than sellers' supply, promoting honesty raises new challenges: sellers may behave dishonestly because they can sell out all products without the necessity of gaining high reputation; buyers may provide untruthful ratings to mislead other buyers in order to have a higher chance to obtain the limited products. In this paper, we propose a novel incentive mechanism to promote honesty in such e-marketplaces. More specifically, our mechanism models both buyer and seller honesty. It offers higher prices to the products provided by honest sellers so that the sellers can gain more profit. Honest buyers also have a higher chance to do business with honest sellers and are able to gain more utility. Theoretical analysis and experimental results show that our mechanism promotes both buyer and seller honesty. Finally, we address the re-entry problem by imposing membership fees on new sellers. We show that the membership fee can discourage sellers from re-entry both in theoretical analysis and experimental validation