Optimal auctions with positive network externalities

Nima Haghpanah, Nicole Immorlica, Vahab Mirrokni, Kamesh Munagala

Research output: Chapter in Book/Report/Conference proceedingConference contribution

20 Citations (Scopus)

Abstract

We consider the problem of designing auctions in social networks for goods that exhibit single-parameter submodular network externalities in which a bidder's value for an outcome is a fixed private type times a known submodular function of the allocation of his friends. Externalities pose many issues that are hard to address with traditional techniques; our work shows how to resolve these issues in a specific setting of particular interest. We operate in a Bayesian environment and so assume private values are drawn according to known distributions. We prove that the optimal auction is APX-hard. Thus we instead design auctions whose revenue approximates that of the optimal auction. Our main result considers step-function externalities in which a bidder's value for an outcome is either zero, or equal to his private type if at least one friend has the good. For these settings, we provide a e/e+1-approximation. We also give a $0.25$-approximation auction for general single-parameter submodular network externalities, and discuss optimizing over a class of simple pricing strategies.

Original languageEnglish (US)
Title of host publicationEC'11 - Proceedings of the 12th ACM Conference on Electronic Commerce
Pages11-20
Number of pages10
DOIs
StatePublished - Jun 30 2011
Event12th ACM Conference on Electronic Commerce, EC'11 - San Jose, CA, United States
Duration: Jun 5 2011Jun 9 2011

Publication series

NameProceedings of the ACM Conference on Electronic Commerce

Other

Other12th ACM Conference on Electronic Commerce, EC'11
CountryUnited States
CitySan Jose, CA
Period6/5/116/9/11

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All Science Journal Classification (ASJC) codes

  • Software
  • Computer Science Applications
  • Computer Networks and Communications

Cite this

Haghpanah, N., Immorlica, N., Mirrokni, V., & Munagala, K. (2011). Optimal auctions with positive network externalities. In EC'11 - Proceedings of the 12th ACM Conference on Electronic Commerce (pp. 11-20). (Proceedings of the ACM Conference on Electronic Commerce). https://doi.org/10.1145/1993574.1993577
Haghpanah, Nima ; Immorlica, Nicole ; Mirrokni, Vahab ; Munagala, Kamesh. / Optimal auctions with positive network externalities. EC'11 - Proceedings of the 12th ACM Conference on Electronic Commerce. 2011. pp. 11-20 (Proceedings of the ACM Conference on Electronic Commerce).
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Haghpanah, N, Immorlica, N, Mirrokni, V & Munagala, K 2011, Optimal auctions with positive network externalities. in EC'11 - Proceedings of the 12th ACM Conference on Electronic Commerce. Proceedings of the ACM Conference on Electronic Commerce, pp. 11-20, 12th ACM Conference on Electronic Commerce, EC'11, San Jose, CA, United States, 6/5/11. https://doi.org/10.1145/1993574.1993577

Optimal auctions with positive network externalities. / Haghpanah, Nima; Immorlica, Nicole; Mirrokni, Vahab; Munagala, Kamesh.

EC'11 - Proceedings of the 12th ACM Conference on Electronic Commerce. 2011. p. 11-20 (Proceedings of the ACM Conference on Electronic Commerce).

Research output: Chapter in Book/Report/Conference proceedingConference contribution

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Haghpanah N, Immorlica N, Mirrokni V, Munagala K. Optimal auctions with positive network externalities. In EC'11 - Proceedings of the 12th ACM Conference on Electronic Commerce. 2011. p. 11-20. (Proceedings of the ACM Conference on Electronic Commerce). https://doi.org/10.1145/1993574.1993577