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We study the optimal pricing for revenue maximization over social networks in the presence of positive network externalities. In our model, the value of a digital good for a buyer is a function of the set of buyers who have already bought the item. In this setting, a decision to buy an item depends on its price and also on the set of other buyers that have already owned that item. The revenue maximization...
We study the problem of selling an item to strategic buyers in the presence of positive historical externalities, where the value of a product increases as more people buy and use it. This increase in the value of the product is the result of resolving bugs or security holes after more usage. We consider a continuum of buyers that are partitioned into types where each type has a valuation function...
We study safety level coalitions in competitive games. Given a normal form game, we define a corresponding cooperative game with transferable utility, where the value of each coalition is determined by the safety level payoff it derives in the original—non-cooperative—game. We thus capture several key features of agents’ behavior: (i) the possible monetary transfer among the coalition members; (ii)...
We consider the Stackelberg shortest-path pricing problem, which is defined as follows. Given a graph G with fixed-cost and pricable edges and two distinct vertices s and t, we may assign prices to the pricable edges. Based on the predefined fixed costs and our prices, a customer purchases a cheapest s-t-path in G and we receive payment equal to the sum of prices of pricable edges belonging to the...
The well-known Tarski’s fixed point theorem asserts that an increasing mapping from a complete lattice into itself has a fixed point. This theorem plays an important role in the development of supermodular games for economic analysis. Let C be a finite lattice consisting of all integer points in an n-dimensional box and f be an increasing mapping from C into itself in terms of lexicographic ordering...
We consider profit-maximization problems for combinatorial auctions with non-single minded valuation functions and limited supply. We obtain fairly general results that relate the approximability of the profit-maximization problem to that of the corresponding social-welfare-maximization (SWM) problem, which is the problem of finding an allocation (S1,...,Sn...
We study electoral campaign management scenarios in which an external party can buy votes, i.e., pay the voters to promote its preferred candidate in their preference rankings. The external party’s goal is to make its preferred candidate a winner while paying as little as possible. We describe a 2-approximation algorithm for this problem for a large class of electoral systems known as scoring rules...
The envy-free pricing problem can be stated as finding a pricing and allocation scheme in which each consumer is allocated a set of items that maximize her utility under the pricing. The goal is to maximize seller revenue. We study the problem with general supply constraints which are given as an independence system defined over the items. The constraints, for example, can be a number of linear constraints...
A common approach to analyzing repeated auctions, such as sponsored search auctions, is to treat them as complete information games, because it is assumed that, over time, players learn each other’s types. This overlooks the possibility that players may impersonate another type. Many standard auctions (including generalized second price auctions and core-selecting auctions), as well as the Kelly mechanism,...
Identical products being sold at different prices in different locations is a common phenomenon. To model such scenarios, we supplement the classical Fisher market model by introducing transaction costs. For every buyer i and good j, there is a transaction cost of cij; if the price of good j is pj, then the cost to the buyer i...
Most existing market maker mechanisms for prediction markets are designed for events with a finite number of outcomes. All known attempts on designing market makers for forecasting continuous-outcome events resulted in mechanisms with undesirable properties. In this paper, we take an axiomatic approach to study whether it is possible for continuous-outcome market makers to satisfy certain desirable...
In recent years, a number of online labor markets have emerged that allow workers from around the world to sell their labor to an equally global pool of buyers. The creators of these markets play the role of labor market intermediary by providing institutional support and remedying informational asymmetries. In this paper, I explore market creators’ choices of price structure, price level and investment...
We study formally discrete bidding strategies for the game induced by the Generalized Second Price keyword auction mechanism. Such strategies have seen experimental evaluation in the recent literature as parts of iterative best response procedures, which have been shown not to converge. We give a detailed definition of iterative best response under these strategies and, under appropriate discretization...
We characterize the performance of strategyproof and group-strategyproof social choice rules, for placing a facility on the nodes of a metric network inhabited by N autonomous self-interested agents. Every agent owns a set of locations and caters to minimization of its cost which is the total distance from the facility to its locations. Agents may misreport their locations, so as to manipulate the...
The problem of influence maximization deals with choosing the optimal set of nodes in a social network so as to maximize the resulting spread of a technology (opinion, product-ownership, etc.), given a model of diffusion of influence in a network. A natural extension is a competitive setting, in which the goal is to maximize the spread of our technology in the presence of one or more competitors....
We propose a new proxy bidding mechanism to allocate courses to students given students’ reported preferences. Our mechanism is motivated by a specific strategic downgrading manipulation observed in the course allocation mechanism currently used at Harvard Business School (HBS). The proxy bidding mechanism simplifes students’ decisions by directly incorporating downgrading into the mechanism. ...
Recently, mechanism design without monetary transfers is attracting much attention, since in many application domains on Internet, introducing monetary transfers is impossible or undesirable. Mechanism design studies how to design mechanisms that result in good outcomes even when agents strategically report their preferences. However, in highly anonymous settings such as the Internet, declaring preferences...
Recent results, establishing evidence of intractability for such restrictive utility functions as additively separable, piecewise-linear and concave, under both Fisher and Arrow-Debreu market models, have prompted the question of whether we have failed to capture some essential elements of real markets, which seem to do a good job of finding prices that maintain parity between supply and demand. ...
Mechanism design provides a useful practical paradigm for competitive resource allocation when agent preferences are uncertain. Vickrey-Clarke-Groves (VCG) mechanism offers a general technique for resource allocation with payments, ensuring allocative efficiency while eliciting truthful information about preferences. However, VCG relies on exact computation of optimal allocation of resources, a problem...
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