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| Main Authors: | , , |
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| Format: | Preprint |
| Published: |
2025
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| Subjects: | |
| Online Access: | https://arxiv.org/abs/2512.22749 |
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Table of Contents:
- We study the pricing behavior of third-party platforms facing strategic agents. Assuming the platform is a revenue maximizer, it observes market features that generally affect demand. Since only the equilibrium price and quantity are observable, this presents a general demand learning problem under confounding. Mathematically, we develop an algorithm with optimal regret of $\Tilde{\cO}(\sqrt{T}\wedgeσ_S^{-2})$. Our results reveal that supply-side noise fundamentally affects the learnability of demand, leading to a phase transition in regret. Technically, we show that non-i.i.d. actions can serve as instrumental variables for learning demand. We also propose a novel homeomorphic construction that allows us to establish estimation bounds without assuming star-shapedness, providing the first efficiency guarantee for learning demand with deep neural networks. Finally, we demonstrate the practical applicability of our approach through simulations and real-world data from Zomato and Lyft.