Our model of an information filtering economy consists of a population of idealized agents engaged in trading news articles. We choose to disregard all issues of security, representation of data, and communication protocol, to focus exclusively on the dynamical and economical aspects of the system.
Figure 1: Part of an idealized news filtering economy. Only a subset of
agents is shown. See text for interpretation of symbols.
In particular, the economy consists of a source agent that publishes news articles, C consumer agents that want to buy articles they are interested in, B broker agents that buy selected articles from the source and resell them to consumers, and a market infrastructure that provides communication and computation services to all agents. Fig. 1 represents the information filtering economic model. The ellipse at the top represents the source agent, brokers are in the middle, and consumers are at the bottom. Each agent's internal parameters (defined below) are printed inside its ellipse. The market infrastructure is represented by the rectangle on the left. Solid lines represent the propagation of a sample article through broker 1. Broken lines indicate payment, and are labeled with symbols (explained below) for the amount paid.
The source agent publishes one article at each time step t.
It classifies articles according to its
own internal categorization scheme, assigning
each a category index j when it is offered.
The nature of the categories, and the number J of them, do not change.
We represent this (hidden) classification scheme by a random process
in which an article is assigned category j with fixed probability
. The set of all is the source's category
prevalence vector 
. Each article is labeled with its category
index and
offered for sale to all brokers at a fixed price 
. For each
article
sold to a broker, the source pays a fixed transport cost 
.
Upon receiving an offer, each broker b decides whether or not to buy
the article using its own evaluation method, which may be
uncorrelated with the source's categorization scheme. For each
evaluation that it makes, the broker pays the system a fixed
computation cost 
. The broker's evaluation method
is approximated by a random process parametrized by its
interest vector 
: it buys an article labeled (by the
source) with category j with probability 
.
When broker b purchases an article, it immediately
sends it to a set of subscribing consumers, paying tranportation
cost for each. Subscribers examine the article, and pay
the broker 
if they want the right to use (``consume'') it.
The broker's internal parameters and are under its
direct control.
Subscriptions are represented by a
subscription matrix S, where 
if consumer c
subscribes to broker b, and 
if not. Subscriptions are
maintained only with the consent of both parties and may be cancelled
by either at any time. This requirement is represented by setting
,
where 
if broker b wants consumer c as a
subscriber and 
if not, and
if consumer c wants to subscribe to broker
b and 
if not.
Each consumer waits for articles to arrive from the brokers to which
it subscribes. When a consumer receives one or more copies of an
article, it pays the computation cost to determine whether it
is interested in the article, then decides whether (and from
whom) to buy it. Like the brokers, the consumers' evaluation function
is approximated by a stochastic process parametrized by an interest
vector 
: consumer c will be interested in an
article labeled with category j with fixed probability 
.
If a consumer is interested in an article, it then selects from the
set of brokers it subscribes to the broker
with the cheapest offer.
The consumer then decides whether
its interest justifies paying 
for that article. For reasons
of simplicity, we model this decision process as follows: each
consumer assigns a global constant anticipated value V to each
article it is interested in. Then if 
, it purchases the
usage rights; otherwise it discards the article
unused.
An alternative formulation replaces the consumer's
computational cost with a cost 
for receiving and
discarding ``junk''. In this case the consumer either pays
to the broker for the rights to an article, or to
the system to dispose of it. The transformation 
,
renders these two views
mathematically equivalent.