Truth-Telling Reservations

24 Pages Posted: 9 Aug 2005

See all articles by Fang Wu

Fang Wu

HP Labs

Li Zhang

Hewlett-Packard Laboratories

Bernardo A. Huberman

CableLabs

Date Written: July 17, 2005

Abstract

We present a mechanism for reservations of bursty resources that is both truthful and robust. It consists of option contracts whose pricing structure induces users to reveal the true likelihoods that they will purchase a given resource. Users are also allowed to adjust their options as their likelihood changes. This scheme helps users save cost and the providers to plan ahead so as to reduce the risk of under-utilization and overbooking. The mechanism extracts revenue similar to that of a monopoly provider practicing temporal pricing discrimination with a user population whose preference distribution is known in advance.

Keywords: Contract design, truth-telling

JEL Classification: D82

Suggested Citation

Wu, Fang and Zhang, Li and Huberman, Bernardo A., Truth-Telling Reservations (July 17, 2005). Available at SSRN: https://ssrn.com/abstract=771804 or http://dx.doi.org/10.2139/ssrn.771804

Fang Wu

HP Labs ( email )

Palo Alto, CA 94304
United States

Li Zhang

Hewlett-Packard Laboratories ( email )

1501 Page Mill Road
Palo Alto, CA 94301
United States

Bernardo A. Huberman (Contact Author)

CableLabs ( email )

400 W California Ave
Sunnyvale, CA 94086
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
114
Abstract Views
1,875
Rank
435,891
PlumX Metrics