Handle URI:
http://hdl.handle.net/10754/599399
Title:
Pricing Strategies for Viral Marketing on Social Networks
Authors:
Arthur, David; Motwani, Rajeev; Sharma, Aneesh; Xu, Ying
Abstract:
We study the use of viral marketing strategies on social networks that seek to maximize revenue from the sale of a single product. We propose a model in which the decision of a buyer to buy the product is influenced by friends that own the product and the price at which the product is offered. The influence model we analyze is quite general, naturally extending both the Linear Threshold model and the Independent Cascade model, while also incorporating price information. We consider sales proceeding in a cascading manner through the network, i.e. a buyer is offered the product via recommendations from its neighbors who own the product. In this setting, the seller influences events by offering a cashback to recommenders and by setting prices (via coupons or discounts) for each buyer in the social network. This choice of prices for the buyers is termed as the seller's strategy. Finding a seller strategy which maximizes the expected revenue in this setting turns out to be NP-hard. However, we propose a seller strategy that generates revenue guaranteed to be within a constant factor of the optimal strategy in a wide variety of models. The strategy is based on an influence-and-exploit idea, and it consists of finding the right trade-off at each time step between: generating revenue from the current user versus offering the product for free and using the influence generated from this sale later in the process. © 2009 Springer-Verlag Berlin Heidelberg.
Citation:
Arthur D, Motwani R, Sharma A, Xu Y (2009) Pricing Strategies for Viral Marketing on Social Networks. Internet and Network Economics: 101–112. Available: http://dx.doi.org/10.1007/978-3-642-10841-9_11.
Publisher:
Springer Science + Business Media
Journal:
Lecture Notes in Computer Science
Issue Date:
2009
DOI:
10.1007/978-3-642-10841-9_11
Type:
Book Chapter
ISSN:
0302-9743; 1611-3349
Sponsors:
This research has been supported in part by NSF Grant ITR-0331640, TRUST(NSF award number CCF-0424422), and grants from Cisco, Google, KAUST,Lightspeed, and Microsoft. The third author is grateful to Jason Hartline andMukund Sundararajan for useful discussions.
Appears in Collections:
Publications Acknowledging KAUST Support

Full metadata record

DC FieldValue Language
dc.contributor.authorArthur, Daviden
dc.contributor.authorMotwani, Rajeeven
dc.contributor.authorSharma, Aneeshen
dc.contributor.authorXu, Yingen
dc.date.accessioned2016-02-28T05:50:23Zen
dc.date.available2016-02-28T05:50:23Zen
dc.date.issued2009en
dc.identifier.citationArthur D, Motwani R, Sharma A, Xu Y (2009) Pricing Strategies for Viral Marketing on Social Networks. Internet and Network Economics: 101–112. Available: http://dx.doi.org/10.1007/978-3-642-10841-9_11.en
dc.identifier.issn0302-9743en
dc.identifier.issn1611-3349en
dc.identifier.doi10.1007/978-3-642-10841-9_11en
dc.identifier.urihttp://hdl.handle.net/10754/599399en
dc.description.abstractWe study the use of viral marketing strategies on social networks that seek to maximize revenue from the sale of a single product. We propose a model in which the decision of a buyer to buy the product is influenced by friends that own the product and the price at which the product is offered. The influence model we analyze is quite general, naturally extending both the Linear Threshold model and the Independent Cascade model, while also incorporating price information. We consider sales proceeding in a cascading manner through the network, i.e. a buyer is offered the product via recommendations from its neighbors who own the product. In this setting, the seller influences events by offering a cashback to recommenders and by setting prices (via coupons or discounts) for each buyer in the social network. This choice of prices for the buyers is termed as the seller's strategy. Finding a seller strategy which maximizes the expected revenue in this setting turns out to be NP-hard. However, we propose a seller strategy that generates revenue guaranteed to be within a constant factor of the optimal strategy in a wide variety of models. The strategy is based on an influence-and-exploit idea, and it consists of finding the right trade-off at each time step between: generating revenue from the current user versus offering the product for free and using the influence generated from this sale later in the process. © 2009 Springer-Verlag Berlin Heidelberg.en
dc.description.sponsorshipThis research has been supported in part by NSF Grant ITR-0331640, TRUST(NSF award number CCF-0424422), and grants from Cisco, Google, KAUST,Lightspeed, and Microsoft. The third author is grateful to Jason Hartline andMukund Sundararajan for useful discussions.en
dc.publisherSpringer Science + Business Mediaen
dc.titlePricing Strategies for Viral Marketing on Social Networksen
dc.typeBook Chapteren
dc.identifier.journalLecture Notes in Computer Scienceen
dc.contributor.institutionStanford University, Palo Alto, United Statesen
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