Bundle pricing with comparable items

Grigoriev, Alexander and Loon van, Joyce and Sviridenko, Maxim and Uetz, Marc and Vredeveld, Tjark (2007) Bundle pricing with comparable items. In: 15th Annual European Symposium, ESA, 8-10 Oct 2007, Eilat, Israel.

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Abstract:	We consider a revenue maximization problem where we are selling a set of items, each available in a certain quantity, to a set of bidders. Each bidder is interested in one or several bundles of items. We assume the bidders’ valuations for each of these bundles to be known. Whenever bundle prices are determined by the sum of single item prices, this algorithmic problem was recently shown to be inapproximable to within a semi-logarithmic factor. We consider two scenarios for determining bundle prices that allow to break this inapproximability barrier. Both scenarios are motivated by problems where items are different, yet comparable. First, we consider classical single item prices with an additional monotonicity constraint, enforcing that larger bundles are at least as expensive as smaller ones. We show that the problem remains strongly NP-hard, and we derive a PTAS. Second, motivated by real-life cases, we introduce the notion of affine price functions, and derive fixed-parameter polynomial time algorithms.
Item Type:	Conference or Workshop Item
Copyright:	© 2007 Springer
Faculty:	Electrical Engineering, Mathematics and Computer Science (EEMCS)
Research Group:	Discrete Mathematics and Mathematical Programming (DMMP)
Link to this item:	http://purl.utwente.nl/publications/62053
Official URL:	http://dx.doi.org/10.1007/978-3-540-75520-3_43
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