Invited Speech I: Optimal Selling Scheme in Social Networks: Hierarchical Signaling, Sequential Selling, and Chain Structure
Dr. Ying-Ju Chen (The Hong Kong University of Science and Technology)
Abstract: We study the optimal selling scheme when a seller sells a product/service with a positive consumption externality, and customers are uncertain about the product's/service's value. Because early adopters learn this value, we consider the customers' intrinsic signaling incentives and positive feedback effects. Allowing the seller to choose the sequence of customers' decisions (as an endogenous hierarchy) implies that signaling takes place in multiple rounds. It is practically relevant as information transmission through social networks is pervasive. To tackle this hierarchical signaling problem, we develop a novel dynamic-programming approach that yields analytical expressions of the equilibrium outcomes.
The profit-maximizing structure turns out to be a chain in which the seller sells to the customers one by one. The sequential selling scheme is not only profitable for the seller but also beneficial to the society. The profit-maximizing pricing exhibits a cream-skimming property -- decreasing prices along the sequence. The lack of seller's commitment is detrimental to the social welfare; nonetheless, the sequential selling still boosts up the seller's profit. When customers are allowed to freely disclose their quantity decisions to others, they willingly comply with the seller's plan of information transmissions. Despite the inherent value uncertainty, the optimal usage of information transmissions requires deliberate restricted access to information amongst customers. The analysis provides tactical recommendations for pricing pattern and how it is influenced by the information transmission. Our result also suggests some congruence between the profit and welfare maximization. Thus, from the regulation perspective, banning the seller's commitment power or the discretion to choose the sequence of serving customers can be harmful to the society.
Invited Speech II: Contracting Models for P2P Economy
Dr. Yung-Ming Li (National Chiao Tung University)
Abstract: In recent years, P2P business model has become an increasingly popular paradigm for digital as well as physical resource exchanging economy. P2P economy is closely associated with sharing economy (market participants -buyer/seller aspect) and platform economy (market provider aspect). Recent progress in P2P economy models has widely covered various domains of digital content distribution, physical resource sharing, and social finance, and so on.
In the talk, we will first share the development of optimal contracts for a P2P network by a profit-seeking provider to support the operations of an online file exchange service. By utilizing the principal-agent model of incentive theory, we propose appropriate reward and pricing schemes for profit-seeking P2P content distribution networks. Then, we will have general discussions on the emerging applications and corresponding research issues of P2P economy, particularly in areas of P2P living resource sharing and P2P financing.
Invited Speech III: Managing Distribution Contract Designs in the Digital Content Value Chain
Dr. Icheng Robert Chiang (Fordham University)
Abstract: The web streaming's ease of content search, on-demand access, and wide viewing device options have helped create a content distribution channel that supplements and competes with the cable. From the cable operators' perspective, not only there is a continued erosion of the subscriber base with the emergence of "cord-cutters" and "cord-nevers," the shift to online viewing also adversely affects their advertising revenue. Using multihoming Hotelling model and Nash bargaining solution, we incorporate provider, content, and subscriber heterogeneities when deriving contractual terms for digital distribution along the content value chain. In particular, by comparing three contract negotiation settings, we show how content quality, library size, and advertising revenue could affect the licensing and subscription fees and would cause titles under negotiation be kept exclusive, shown syndicated, or redistributed following a "windowing" delay.
