Rethinking Incentives in Recommender Systems: Are Monotone Rewards Always Beneficial?
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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 reward mechanism employed by these platforms creates a competitive environment among creators which affect their production choices and, consequently, content distribution and system welfare. It is thus crucial to design the platform's reward mechanism in order to steer the creators' competition towards a desirable welfare outcome in the long run. This work makes two major contributions in this regard: first, 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 optimal welfare. To circumvent this limitation, we introduce Backward Rewarding Mechanisms (BRMs) and show that the competition game resultant from BRMs possesses a potential game structure. BRMs thus naturally induce strategic creators' collective behaviors towards optimizing the potential function, which can be designed to match any given welfare metric. In addition, the BRM class can be parameterized to allow the platform to directly optimize welfare within the feasible mechanism space even when the welfare metric is not explicitly defined.
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