Paper
Token Is All You Price
Authors
Weijie Zhong
Abstract
We build a mechanism design framework where a platform designs GenAI models to screen users who obtain instrumental value from the generated conversation and privately differ in their preference for latency. We show that the revenue-optimal mechanism is simple: deploy a single aligned (user-optimal) model and use token cap as the only instrument to screen the user. The design decouples model training from pricing, is readily implemented with token metering, and mitigates misalignment pressures.