Rethinking Incentives in Recommender Systems: Are Monotone Rewards Always Beneficial?

Fan Yao, Chuanhao Li, Karthik Abinav Sankararaman, Yiming Liao, Yan Zhu, Qifan Wang, Hongning Wang, Haifeng Xu

Keywords: Recommender system, mechanism design

Abstract: The past decade has witnessed the flourishing of a new profession as media content creators, who rely on revenue streams from online content recommendation platforms. The rewarding mechanism employed by these platforms creates a competitive environment among creators which affects their production choices and, consequently, content distribution and system welfare. In this work, we uncover a fundamental limit about a class of widely adopted mechanisms, coined Merit-based Monotone Mechanisms, by showing that they inevitably lead to a constant fraction loss of the welfare. To circumvent this limitation, we introduce Backward Rewarding Mechanisms (BRMs) and show that the competition games resulting from BRM possess a potential game structure, which naturally induces the strategic creators' behavior dynamics to optimize any given welfare metric. In addition, the class of BRM can be parameterized so that it allows the platform to directly optimize welfare within the feasible mechanism space even when the welfare metric is not explicitly defined.

Submission Number: 28