Differential pricing with inequity aversion in social networks

Noga Alon, Yishay Mansour, Moshe Tenneholtz

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

18 Scopus citations


We introduce and study the algorithmic problem of maximizing revenue in a network using differential pricing, where the prices offered to neighboring vertices cannot be substantially different. Our most surprising result is that the optimal pricing can be computed efficiently, even for arbitrary revenue functions. In contrast, we show that if one is allowed to introduce discontinuities (by deleting vertices) the optimization problem becomes computationally hard, and we exhibit algorithms for special classes of graphs. We also study a stochastic model, and show that a similar contrast exists there: For pricing without discontinuities the benefit of differential pricing over a single price is negligible, while for differential pricing with discontinuities the difference is substantial.

Original languageEnglish (US)
Title of host publicationEC 2013 - Proceedings of the 14th ACM Conference on Electronic Commerce
PublisherAssociation for Computing Machinery
Number of pages15
ISBN (Print)9781450319621
StatePublished - 2013
Externally publishedYes
Event14th ACM Conference on Electronic Commerce, EC 2013 - Philadelphia, PA, United States
Duration: Jun 16 2013Jun 20 2013

Publication series

NameProceedings of the ACM Conference on Electronic Commerce


Other14th ACM Conference on Electronic Commerce, EC 2013
Country/TerritoryUnited States
CityPhiladelphia, PA

All Science Journal Classification (ASJC) codes

  • Software
  • Computer Science Applications
  • Computer Networks and Communications


  • Algorithmic game theory
  • Pricing
  • Social networks


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