Optimal design balances costs and values in self-financing events
Optimally Curating an Event
Computer Science and Game Theory
Summary
Organizing an event that doesn't lose money means choosing who to invite carefully. Some participants bring value but cost money, while others might pay but reduce overall quality. The authors study how to pick attendees to keep the event balanced financially and high in quality. They develop mathematical methods to find the best selection when adding values together or combining them in more complex ways.
What this means in practice
- •For event planners: Select attendees to maximize event quality without financial loss by balancing costly contributors and paying but potentially harmful participants.
- •For online marketplace designers: Design self-financing platforms that balance costly service providers and paying users with varying impacts on platform value.
A theory result. No direct application yet.
Authors
MohammadTaghi Hajiaghayi, Sebastien Lahaie, Mohammad Mahdavi, Suho Shin
Abstract
We study the optimal design of a self-financing event, a problem that requires balancing the recruitment of costly, positive-value participants with revenue-generating agents who may impose negative values on the event. We introduce a novel two-sided mechanism design framework with plus agents equipped with private costs and positive impact, and minus agents with private values and negative impact upon inclusion in the event, to maximize the overall quality of the event under a budget-balanced (BB) constraint so that the designer does not run a deficit. We conduct a comprehensive study on the theory of optimal event curation on various utility functions. For additive utility, we fully characterize the optimal incentive-compatible Bayesian mechanism under both the ex-ante and ex-post BB constraints. For submodular utility, we propose an ex-ante BB mechanism that achieves a constant-factor approximation to the optimal Bayesian mechanism.