dorsal/arxiv
View SchemaOn click-fraud under pro-rata revenue sharing rule
| Authors | Hao Yu |
|---|---|
| Categories | |
| ArXiv ID | 2601.09573vv1 |
| URL | https://arxiv.org/abs/2601.09573 |
| License | http://arxiv.org/licenses/nonexclusive-distrib/1.0/ |
Abstract
Click-fraud is commonly seen as a key vulnerability of pro-rata revenue sharing on music streaming platforms, whereas user-centric is largely immune. This paper develops a tractable non-cooperative model in which artists can purchase fraud activity that generates undetectable fake streams up to a technological limit. We show that pro-rata can be fraud-robust: when fraud technology is weak, honesty is a strict dominant strategy, and an efficient fraud-free equilibrium obtains. When fraud technology is strong, a unique fraud equilibrium arises, yet aggregate fake streams remain bounded. Although fraud is inefficient, the resulting redistribution may improve fairness in some cases. To mitigate fraud without abandoning pro-rata, we introduce a parametric weighted rule that interpolates between pro-rata and user-centric, and characterize parameter ranges that restore a fraud-free equilibrium under technology constraint. We also discuss implications of Spotify's modernized royalty system for fraud incentives.
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"abstract": "Click-fraud is commonly seen as a key vulnerability of pro-rata revenue sharing on music streaming platforms, whereas user-centric is largely immune. This paper develops a tractable non-cooperative model in which artists can purchase fraud activity that generates undetectable fake streams up to a technological limit. We show that pro-rata can be fraud-robust: when fraud technology is weak, honesty is a strict dominant strategy, and an efficient fraud-free equilibrium obtains. When fraud technology is strong, a unique fraud equilibrium arises, yet aggregate fake streams remain bounded. Although fraud is inefficient, the resulting redistribution may improve fairness in some cases. To mitigate fraud without abandoning pro-rata, we introduce a parametric weighted rule that interpolates between pro-rata and user-centric, and characterize parameter ranges that restore a fraud-free equilibrium under technology constraint. We also discuss implications of Spotify\u0027s modernized royalty system for fraud incentives.",
"arxiv_id": "2601.09573",
"authors": [
"Hao Yu"
],
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"econ.TH"
],
"license": "http://arxiv.org/licenses/nonexclusive-distrib/1.0/",
"title": "On click-fraud under pro-rata revenue sharing rule",
"url": "https://arxiv.org/abs/2601.09573",
"version": "v1"
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