Optimal Management of Evolving Hierarchies

【Author】 Hougaard, Jens Leth; Moreno-Ternero, Juan D.; Osterdald, Lars Peter

【Source】MANAGEMENT SCIENCE

【影响因子】6.172

【Abstract】We study the optimal management of evolving hierarchies of revenue-generating agents. The initiator invests into expanding the hierarchy by adding another agent, who will bring revenues to the joint venture and who will invest herself into expanding the hierarchy further, and so on. The higher the investments (which are private information), the higher the probability of expanding the hierarchy. An allocation scheme specifies how revenues are distributed, as the hierarchy evolves. We obtain schemes that are socially optimal and initiator-optimal, respectively. Our results have potential applications for blockchain, cryptocurrencies, socialmobilization, and multilevel marketing.

【Keywords】optimal allocation schemes; hierarchies; multi-level marketing; Nash equilibrium; blockchain

【发表时间】2022 AUG

【收录时间】2023-06-28

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