Equilibrium Pricing in Oligopolistic Data Markets

We study equilibrium pricing in oligopolistic data markets with budget-constrained buyers (e.g., ML companies purchasing data to improve model accuracy) and strategic data sellers. Sellers compete by setting prices for their datasets, giving rise to a pricing game whose pure Nash equilibria correspond to equilibrium prices. While equilibrium prices are guaranteed for rivalrous goods via competitive equilibrium, we show that the non-rivalry of data fundamentally alters this picture: an exact Nash equilibrium need not exist, and in fact no 1.364-approximate equilibrium exists under uniform pricing. We therefore investigate relaxed equilibrium notions. Allowing sellers to use beyond-uniform pricing—specifically, piecewise-linear convex pricing functions—guarantees approximate stability within a constant factor: there exists a pricing profile in which no seller can improve revenue by a factor of two by deviating to any uniform price (a 2-approximate Nash equilibrium). Finally, our simulations demonstrate fast convergence and empirical approximation guarantees that outperform the worst-case bound of 2.