2023/06/18 by Omer Nahum, Nahum, Omer, Gali Noti +5
Business, Management and Accounting · Social Sciences · #Computer Science and Game Theory (cs.GT) #FOS: Computer and information sciences #Italian Social Issues and Migration #Machine Learning (cs.LG) #Management, Economics, and Public Policy
paper · pdf · doi:10.48550/arxiv.2306.10606
openalex publication_date 2023/06/18 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/03
Congestion is a common failure mode of markets, where consumers compete inefficiently on the same subset of goods (e.g., chasing the same small set of properties on a vacation rental platform). The typical economic story is that prices decongest by balancing supply and demand. But in modern online marketplaces, prices are typically set in a decentralized way by sellers, and the information about items is inevitably partial. The power of a platform is limited to controlling representations -- the subset of information about items presented by default to users. This motivates the present study of decongestion by representation, where a platform seeks to learn representations that reduce congestion and thus improve social welfare. The technical challenge is twofold: relying only on revealed preferences from the choices of consumers, rather than true preferences; and the combinatorial problem associated with representations that determine the features to reveal in the default view. We tackle both challenges by proposing a differentiable proxy of welfare that can be trained end-to-end on consumer choice data. We develop sufficient conditions for when decongestion promotes welfare, and present the results of extensive experiments on both synthetic and real data that demonstrate the utility of our approach.