Simpler sybil-proof mechanisms for multi-level marketing
Fabio A. Drucker, Lisa Fleischer · 2012
Multi-level marketing refers to a marketing approach in which buyers are encouraged to take an active role in promoting the product. This is done by offering them a reward for each successful referral of the product to other prospective buyers. To encourage potential customers to buy early and to give referrals to influential people, these mechanisms also reward indirect referrals --- a direct referral linked to the buyer through other direct referrals. Doing so can make the referral/reward system vulnerable to sybil attacks --- where profit maximizers create several replicas in order to maximize their rewards.