Pricing commodities, or how to sell when buyers have restricted valuations

  • Authors:
  • Robert Krauthgamer;Aranyak Mehta;Atri Rudra

  • Affiliations:
  • Weizmann Institute, Rehovot, Israel and IBM Almaden, San Jose, CA;Google Inc., Mountain View, CA;University at Buffalo, The State University of New York, NY

  • Venue:
  • WAOA'07 Proceedings of the 5th international conference on Approximation and online algorithms
  • Year:
  • 2007

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Abstract

How should a seller price his goods in a market where each buyer prefers a single good among his desired goods, and will buy the cheapest such good, as long as it is within his budget? We provide efficient algorithms that compute near-optimal prices for this problem, focusing on a commodity market, where the range of buyer budgets is small. We also show that our technique (which is based on LP-rounding) easily extends to a different scenario, in which the buyers want to buy all the desired goods, as long as they are within budget.