On Fixed-Price Marketing for Goods with Positive Network Externalities

  • Vahab S. Mirrokni
  • Sebastien Roch
  • Mukund Sundararajan
Part of the Lecture Notes in Computer Science book series (LNCS, volume 7695)


In this paper we discuss marketing strategies for goods that have positive network externalities, i.e., when a buyer’s value for an item is positively influenced by others owning the item. We investigate revenue-optimal strategies of a specific form where the seller gives the item for free to a set of users, and then sets a fixed price for the rest. We present a \(1\over 2\)-approximation for this problem under assumptions about the form of the externality. To do so, we apply ideas from the influence maximization literature [13] and also use a recent result on non-negative submodular maximization as a black-box [3,7].


Approximation Algorithm Network Externality Monopoly Price Revenue Maximization Viral Marketing 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  • Vahab S. Mirrokni
    • 1
  • Sebastien Roch
    • 2
  • Mukund Sundararajan
    • 3
  1. 1.Google ResearchNew YorkUSA
  2. 2.Department of MathematicsUW–MadisonUSA
  3. 3.Google ResearchMountain ViewUSA

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