Targeted coupon distribution using social networks

We propose to exploit online social networks in order to reveal user preferences such that goods and services might be targeted appropriately. We consider goods and services that are consumed periodically, and a user model where users could buy different numbers of goods at a marked ("high") price and at a discounted ("low") price. The problem is to identify users who are interested in the good, and to discount them sufficiently that the entire demand is realized, but not so much that revenue is compromised. Using techniques from "backpressure routing" used for control of multihop communication networks, we develop a multi627hop coupon forwarding scheme in which users are incentivized to forward the right number of coupons to appropriate neighbors such that the above target is achieved. We also develop a simple delay-based heuristic algorithm that also shows a near-optimal performance.