CATS-Sep-28-2012
Title[edit]
Profit Maximization of Seller over Social Markets
Speaker[edit]
Hamid Mahini, University of Maryland
Abstract[edit]
Despite the rapid growth, online social networks have not yet generated significant revenue. Most efforts to design a comprehensive business model for monetizing such social networks are based on contextual display advertising. An alternative way to monetize social networks is viral marketing, or advertising through word-of-mouth. This can be done by understanding the influences among buyers in a social network. The increasing popularity of these networks has allowed companies to collect and use information about inter-relationships among users of social networks. In particular, by designing certain experiments, these companies can determine how users influence each others’ activities.
In this talk, I will describe the optimal pricing for revenue maximization in the presence of positive network influences. In this model, the value of a digital good for a buyer is a function of the set of buyers who have already bought the item. The talk will focus on setting in which seller post a public price at each step. The price at each step is visible to all buyers, and each buyer might decide to buy the item based on her valuation for the item and the price of the item in that time step. The main questions which will be answered during this talk are: How can we use network influences in order to maximize the revenue? How re-pricing rate effects on revenue?
