Maximizing revenue from strategic recommendations under decaying trust

Paul Dütting, Monika Henzinger, Ingmar Weber

Research output: Chapter in Book/Report/Conference proceedingConference contribution

3 Citations (Scopus)

Abstract

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.

Original languageEnglish
Title of host publicationCIKM 2012 - Proceedings of the 21st ACM International Conference on Information and Knowledge Management
Pages2283-2286
Number of pages4
DOIs
Publication statusPublished - 19 Dec 2012
Event21st ACM International Conference on Information and Knowledge Management, CIKM 2012 - Maui, HI, United States
Duration: 29 Oct 20122 Nov 2012

Publication series

NameACM International Conference Proceeding Series

Other

Other21st ACM International Conference on Information and Knowledge Management, CIKM 2012
CountryUnited States
CityMaui, HI
Period29/10/122/11/12

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Keywords

  • banner blindness
  • recommendations
  • trust loss in advertising

ASJC Scopus subject areas

  • Software
  • Human-Computer Interaction
  • Computer Vision and Pattern Recognition
  • Computer Networks and Communications

Cite this

Dütting, P., Henzinger, M., & Weber, I. (2012). Maximizing revenue from strategic recommendations under decaying trust. In CIKM 2012 - Proceedings of the 21st ACM International Conference on Information and Knowledge Management (pp. 2283-2286). (ACM International Conference Proceeding Series). https://doi.org/10.1145/2396761.2398621