Dynamic and non-uniform pricing strategies for revenue maximization

Abstract

We study the Item Pricing problem for revenue maximization in the limited supply setting, where a single seller with n distinct items caters to m buyers with unknown subadditive valuation functions who arrive in a sequence. The seller sets the prices on individual items, and each buyer buys a subset of yet unsold items that maximizes her utility. The goal is to design pricing strategies that guarantee an expected revenue that is within a small factor of the optimal social welfare -- an upper bound on the maximum revenue possible. We design poly-logarithmic approximation algorithms for revenue maximization in this setting, and in process highlight a strong separation between the power of some natural classes of pricing strategies.