A Complexity View of Markets with Social Influence

: In this paper, inspired by the work of Megiddo on the formation of preferences and strategic analysis, we consider an early market model studied in the field of economic theory, in which each trader's utility may be influenced by the bundles of goods obtained by her social neighbors. The goal of this paper is to understand and characterize the impact of social influence on the complexity of computing and approximating market equilibria. We present complexity-theoretic and algorithmic results for approximating market equilibria in this model with focus on two concrete influence models based on the traditional linear utility functions. Recall that an ArrowDebreu market equilibrium in a conventional exchange market with linear utility functions can be computed in polynomial time by convex programming. Our complexity results show that even a bounded-degree, planar influence network can significantly increase the difficulty of equilibrium computation even in markets with only a const...

• Type: Journal
• Year: 2010
• Where: CORR
• Authors: Xi Chen, Shang-Hua Teng
• Keywords: Constant Number, CORR 2010, Education, Linear Utility Functions, Markets