  We consider the pricing problem faced by a seller who assigns a price to a
good that confers its benefits not only to its buyers, but also to other
individuals around them. For example, a snow-blower is potentially useful not
only to the household that buys it, but also to others on the same street.
Given that the seller is constrained to selling such a (locally) public good
via individual private sales, how should he set his prices given the
distribution of values held by the agents?
  We study this problem as a two-stage game. In the first stage, the seller
chooses and announces a price for the product. In the second stage, the agents
(each having a private value for the good) decide simultaneously whether or not
they will buy the product. In the resulting game, which can exhibit a
multiplicity of equilibria, agents must strategize about whether they will
themselves purchase the good to receive its benefits.
  In the case of a fully public good (where all agents benefit whenever any
agent purchases), we describe a pricing mechanism that is approximately
revenue-optimal (up to a constant factor) when values are drawn from a regular
distribution. We then study settings in which the good is only "locally"
public: agents are arranged in a network and share benefits only with their
neighbors. We describe a pricing method that approximately maximizes revenue,
in the worst case over equilibria of agent behavior, for any $d$-regular
network. Finally, we show that approximately optimal prices can be found for
general networks in the special case that private values are drawn from a
uniform distribution. We also discuss some barriers to extending these results
to general networks and regular distributions.
