"Information Design with Unknown Prior" and "Pricing with Tips in Three-Sided Delivery Platforms."

Speaker 1: Ce Li (PhD Candidate in Economics - Boston University)
Title: Information Design with Unknown Prior
Abstract: Classical information design models (e.g., Bayesian persuasion and cheap talk) require players to have perfect knowledge of the prior distribution of the state of the world. Our paper studies repeated persuasion problems in which the information designer does not know the prior.  The information designer learns to design signaling schemes from repeated interactions with the receiver. We design learning algorithms for the information designer to achieve no regret compared to using the optimal signaling scheme with known prior, under two models of the receiver's decision-making. (1) The first model assumes that the receiver knows the prior and can perform posterior update and best respond to signals. In this model, we design a learning algorithm for the information designer with $O(\log T)$ regret in the general case, and another algorithm with $\Theta(\log \log T)$ regret in the case where the receiver has only two actions. (2) The second model assumes that the receiver does not know the prior and employs a no-regret learning algorithm to take actions. We show that the information designer can achieve regret $O(\sqrt{\mathrm{rReg}(T) T})$, where $\mathrm{rReg}(T)=o(T)$ is an upper bound on the receiver's learning regret. Our work thus provides a learning foundation for the problem of information design with unknown prior.

Speaker 2: Gary Ma (PhD Candidate in Computer Science - Harvard University)
Title: Pricing with Tips in Three-Sided Delivery Platforms.
Abstract: We model a delivery platform facilitating transactions among three sides: buyers, stores, and drivers. In addition to buyers paying store-specific purchase prices and drivers receiving store-buyer-specific delivery compensation from the platform, each buyer has the option to directly tip for delivery from a specific store. An equilibrium consists of prices, compensations, tips, and transactions that clears the market.
We illustrate the role of tips in pricing: with tips an equilibrium always exists, but without tips an equilibrium is only guaranteed to exist when drivers outnumber the minimum number of buyers and stores. From an efficiency perspective, the optimal with-tip equilibrium welfare is always weakly larger than the optimal without-tip equilibrium welfare. However, we show that even with tips, efficient equilibria may not exist, and that calculating the optimal equilibrium welfare is NP-hard. To address these challenges, we identify conditions on market structure that ensure the existence of efficient with-tip equilibria and allow these efficient equilibria to be computed in polynomial time.