Value-Based Network Externalities and Optimal Auction Design

Munagala, Kamesh; Xu, Xiaoming

doi:10.1007/978-3-319-13129-0_11

Cited by 3 publications

(4 citation statements)

References 12 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Ad auction is a well-studied scenario with negative externalities where the allocation of slots is assigned to ad bidders by an auctioneer (Kempe and Mahdian 2008;Aggarwal et al 2008;Ghosh and Mahdian 2008;Cavallo and Wilkens 2014;Hummel and McAfee 2014). With the appearance of online social networks, recent work in optimal auction for a single good has also considered (positive) network externalities, where the utility of an individual consumer for the good increases with the number of network neighbors using the same good (Hartline, Mirrokni, and Sundararajan 2008;Haghpanah et al 2013;Munagala and Xu 2014). Our trial-offer model considers both types of externalities, albeit in a different setting.…”

Section: Trial-offer Marketsmentioning

confidence: 99%

Aligning Popularity and Quality in Online Cultural Markets

Hentenryck

Abeliuk

Berbeglia

et al. 2021

ICWSM

View full text Add to dashboard Cite

Social influence is ubiquitous in cultural markets and plays an important role in recommendations for books, songs, and news articles to name only a few. Yet social influence is often presented in a bad light, often because it supposedly increases market unpredictability. Here we study a model of trial-offer markets, in which participants try products and later decide whether to purchase. We consider a simple policy which recovers product quality and ranks the products by quality when presenting them to market participants. We show that, in this setting, market efficiency always benefits from social influence. Moreover, we prove that the market converges almost surely to a monopoly for the product of highest quality, making the market both predictable and asymptotically optimal. Computational experiments confirm that the quality ranking policy quickly identifies "blockbusters", outperforms other policies, and is highly predictable.

show abstract

Section: Trial-offer Marketsmentioning

confidence: 99%

Aligning Popularity and Quality in Online Cultural Markets

Hentenryck

Abeliuk

Berbeglia

et al. 2021

ICWSM

View full text Add to dashboard Cite

show abstract

“…The work [12] discusses how to decide the price for a single type of good allocation (e.g., snow blower) which not only benefits the buyers allocated with the public good but also their neighbors under network externalities. The work [13] further studied the auction design for provisioning the single type of good under incomplete information and network externalities. Different from these two works, our study here focuses on two related types of goods (device and the device-supported service) for bundled pricing.…”

Section: Bundled Versus Hybrid Pricing For Content Sharing Servicesmentioning

confidence: 99%

“…If social service is provided, i.e., D * 2 (p 1 , p 2 ) ≥ 0, or simply p 1 + p 2 ≤ 1, we require p 1 ≤ 1 − c 2 by substituting (14) into p 1 + p * 2 ≤ 1. Substitute p * 2 to (63), we have the optimal device price as the solution to (13).…”

Section: Appendix a Proof Of Proposition 31mentioning

confidence: 99%

See 1 more Smart Citation

Mobile Social Services with Network Externality: From Separate Pricing to Bundled Pricing

Wang

Duan

Zhang

2019

IEEE Trans. Netw. Sci. Eng.

View full text Add to dashboard Cite

Today, many wireless device providers choose to sell devices bundled with complementary mobile social services, which exhibit strong positive network externality. Taking a reverse engineering approach, this paper aims to quantify the benefits of selling devices and complementary services under the following three strategies: separate pricing, bundled pricing, and hybrid pricing (both the separate and bundled options are offered). A comprehensive comparison of the above three strategies is carried out for two popular service models, namely physical connectivity sharing and virtual content sharing, respectively. These two sharing service models are two popular examples under the emerging trend of sharing economy. We first study the physical service model where the provider (e.g., FON) offers users customized WiFi devices for indoor Internet access, and allows service subscribers to physically access all device owners' WiFi when traveling. Observing that all device-owners contribute to the connectivity sharing, we show, via a Stackelberg game theoretic approach, that bundled pricing outperforms separate pricing as long as the total cost of device and service is reasonably low to stimulate network externality. Further, hybrid pricing strictly dominates bundled pricing thanks to the pricing flexibility to keep high marginal profit of device-selling. Next, we investigate the virtual sharing service model where the provider (e.g., Apple) sells devices and device-supported applications. Different from the connectivity service model, in this model service subscribers directly contribute to the virtual content sharing, and the network externality can be fairly strong. We prove that hybrid pricing degenerates to bundled pricing if the network externality degree is larger than the average device valuation, which is in stark contrast with the connectivity service model in which hybrid pricing always outperforms bundled pricing.

show abstract