Game-Theoretic Aspects of Designing Hyperlink Structures

We study the problem of designing the hyperlink structure between the web pages of a web site in order to maximize the revenue generated from the traffic on the web site. We show this problem is equivalent to the well-studied setting of infinite horizon discounted Markov Decision Processes (MDPs). Thus existing results from that literature imply the existence of polynomial-time algorithms for finding the optimal hyperlink structure, as well as a linear program to describe the optimal structure. We use a similar linear program to address our problem (and, by extension all infinite horizon discounted MDPs) from the perspective of cooperative game theory: if each web page is controlled by an autonomous agent, is it possible to give the individuals and coalitions incentive to cooperate and build the optimal hyperlink design? We study this question in the settings of transferrable utility (TU) and non-transferrable utility (NTU) games. In the TU setting, we use linear programming duality to show that the core of the game is non-empty and that the optimal structure is in the core. For the NTU setting, we show that if we allow “mixed” strategies, the core of the game is non-empty, but there are examples that show that the core can be highly inefficient.