Protecting suppliers' private information: the case of stock levels and the impact of correlated items (1603.00182v1)

Abstract: A marketplace is defined where the private data of suppliers (e.g., prosumers) are protected, so that neither their identity nor their level of stock is made known to end customers, while they can sell their products at a reduced price. A broker acts as an intermediary, which takes care of providing the items missing to meet the customers' demand and allows end customers to take advantages of reduced prices through the subscription of option contracts. Formulas are provided for the option price under three different probability models for the availability of items. Option pricing allows the broker to partially transfer its risk on end customers.