Abstract
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].
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Mirrokni, V.S., Roch, S., Sundararajan, M. (2012). On Fixed-Price Marketing for Goods with Positive Network Externalities. In: Goldberg, P.W. (eds) Internet and Network Economics. WINE 2012. Lecture Notes in Computer Science, vol 7695. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-35311-6_43
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DOI: https://doi.org/10.1007/978-3-642-35311-6_43
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