[FoRK] Fwd: [Theory-annc] Special theory seminar, 4 pm, Tuesday, May 3: Vijay Vazirani to speak about "Pricing Digital Goods"
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Tue May 3 00:06:39 PDT 2011
This paper may be of interest to forkers.
---------- Forwarded message ----------
From: umesh vazirani <vazirani at eecs.berkeley.edu>
Date: Tue, May 3, 2011 at 2:37 PM
Subject: [Theory-annc] Special theory seminar, 4 pm, Tuesday, May 3:
Vijay Vazirani to speak about "Pricing Digital Goods"
To: theory-annc at tempo.cs.berkeley.edu
Title: Extending General Equilibrium Theory to the Digital Economy
Speaker: Vijay V. Vazirani, Georgia Tech
4 pm, Tuesday, May 3, 306 Soda Hall.
Abstract: General Equilibrium Theory, the undisputed crown jewel of
Mathematical Economics for over a century, gave a very satisfactory
solution to the central problem of arriving at a principled
method of pricing goods and services -- one that leads to an efficient
allocation of scarce resources among alternative uses. The solution
was based on Adam Smith's principle of maintaining parity between
supply and demand, Walras' notion of equilibrium, and the Arrow-Debreu
Theorem, which proved the existence of equilibrium in a
very general model of the economy.
However, this solution, designed for conventional goods,
is not applicable for digital goods -- once produced, a digital good
can be reproduced at (essentially) zero cost, thus making its supply
infinite. Considering the current size of the digital economy
and its huge growth potential, it is imperative that we obtain
an equally convincing theory for pricing of digital goods.
In this talk, I will describe what appears to be a
first step in this direction.
After taking into consideration idiosyncrasies of the digital realm,
we give a market model that is appropriate for the digital setting,
a notion of equilibrium for this model, and a proof of existence
of equilibrium using Kakutani's fixed point theorem. For a special case,
we also give a polynomial time algorithm and we show that a rational
equilibrium always exists. Finally, I will outline a multitude of
issues that still need to be addressed to obtain a theory for the digital
economy that is on par with the original theory.
Based on the following joint paper with Kamal Jain:
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