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Contribution Details
| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | Design and Analysis of a Hidden Peer-to-peer Backup Market |
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| Series Name | Harvard University |
| Number | 1 |
| Date | 2010 |
| Abstract Text | We present a new market design for a peer-to-peer (p2p) backup application and provide a theoretical and experimental analysis. In domains such as p2p backup, where many non-expert users find markets unnatural or unexpected, it is often a pragmatic requisite to remove or hide the market’s complexities. To this end, we introduce a new design paradigm which we call “hidden market design,” and show, how a market and its user interface (UI) can be designed to hide the underlying complexities, while maintaining the market’s functionality. We enable the p2p backup market using a virtual currency only, and we develop a novel market UI that makes the interaction for the users as seamless as possible. The UI hides or simplifies many aspects of the market, including combinatorial resource constraints, prices, account balances and payments. In a real p2p backup system, we can expect users to update their settings with a delay upon price changes. Therefore, the market is designed to work well even out of equilibrium, by maximizing the buffer between demand and supply. The main theoretical result is an existence and uniqueness theorem, which also holds if a certain percentage of the user population is price-insensitive or even adversarial. However, we also show that the more freedom we give the users, the less robust the system becomes against adversarial attacks. Furthermore, the buffer size has limited controllability via price changes alone and we show how to address this. We introduce a price update algorithm that uses daily aggregate supply and demand data to move prices towards the equilibrium, and we prove that the algorithm converges quickly towards the equilibrium. Finally, we present results from a formative usability study of the market UI, where we found encouraging results regarding the hidden markets paradigm. The market design presented here is implemented as part of a Microsoft research project and an alpha version of the software has been successfully tested. |
| Official URL | http://www.eecs.harvard.edu/%7Eseuken/publications/P2Pbackup_Seuken.pdf |
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