Maximizing revenue from strategic recommendations under decaying trust
Suppose your sole interest in recommending a product to me is to maximize the amount paid to you by the seller for a sequence of recommendations. How should you recommend optimally if I become more inclined to ignore you with each irrelevant recommendation you make? Finding an answer to this question is a key challenge in all forms of marketing that rely on and explore social ties; ranging from personal recommendations to viral marketing. We prove that even if the recommendee regains her initial trust on each successful recommendation, the expected revenue the recommender can make over an infinite period due to payments by the seller is bounded. This can only be overcome when the recommendee also incrementally regains trust during periods without any recommendation. Here, we see a connection to “banner blindness”, suggesting that showing fewer ads can lead to a higher long-term revenue.
Top- Dütting, Paul
- Henzinger, Monika
- Weber, Ingmar
Category |
Paper in Conference Proceedings or in Workshop Proceedings (Paper) |
Event Title |
21st ACM International Conference on Information and Knowledge Management (CIKM) |
Divisions |
Theory and Applications of Algorithms |
Event Location |
Maui, USA |
Event Type |
Conference |
Event Dates |
29 Oct - 02 Nov 2012 |
Series Name |
CIKM'12 21st ACM International Conference on Information and Knowledge Management |
Publisher |
ACM |
Page Range |
pp. 2283-2286 |
Date |
2012 |
Official URL |
http://dl.acm.org/citation.cfm?id=2396761 |
Export |