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Supermodularity and submodularity are also defined for functions defined over subsets of a larger set. Intuitively, a submodular function over the subsets demonstrates "diminishing returns". There are specialized techniques for optimizing submodular functions.
Let <math>S</math> be a finite set. A function <math>f\colon 2^S \to R</math> is submodular if for any <math>A \subset B \subset S</math> and <math>x \in S \setminus B</math>, <math>f(A \cup \{x\})-f(A) \geq f(B \cup \{x\})-f(B)</math>. For supermodularity, the inequality is reversed.
A simple illustration example motivates this definition of submodular. Let S be a set of different foods, <math>M \subset S</math> a meal, and <math>f(M)</math> the "goodness" of that meal. Then A above is one meal, and B is A but with even more options. Let x be ice cream. Adding ice cream to a meal is always good, but it is best if there is not already a dessert. If A and B either both have a dessert or both do not, then adding ice cream to them is comparably good. But if A does not have dessert and B does, then the effect of adding ice cream is more pronounced in A.
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