Open Access
Is Efficiency Expensive
Tim Roughgarden,Mukund Sundararajan +1 more
- 01 Jan 2007
TL;DR: In this article, the authors study the simultaneous optimization of efficiency and revenue in pay-per-click keyword auctions in a Bayesian setting and show that the efficient keyword auction yields near-optimal revenue even under modest competition.
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Abstract: We study the simultaneous optimization of efficiency and revenue in pay-per-click keyword auctions in a Bayesian setting. Our main result is that the efficient keyword auction yields near-optimal revenue even under modest competition. In the process, we build on classical results in auction theory to prove that increasing the number of bidders by the number of slots outweighs the benefit of employing the optimal reserve price.
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Citations
Reserve prices in internet advertising auctions: a field experiment
Michael Ostrovsky,Michael Schwarz +1 more
- 05 Jun 2011
TL;DR: A large field experiment on setting reserve prices in auctions for online advertisements guided by the theory of optimal auction design suitably adapted to the sponsored search setting shows that following the introduction of new reserve prices revenues in these auctions have increased substantially.
•Posted Content
Reserve Prices in Internet Advertising Auctions: A Field Experiment
Michael Ostrovsky,Michael Schwarz +1 more
- 01 Jan 2009
TL;DR: In this paper, the authors present the results of a large field experiment on setting reserve prices in auctions for online advertisements, guided by the theory of optimal auction design suitably adapted to the sponsored search setting.
238
DESIGNING ONLINE ADVERTISING MARKETS' Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions
Benjamin Edelman,Michael Schwarz +1 more
- 01 Jan 2010
TL;DR: The use of a static game of complete information often offers important benefits as discussed by the authors, for one, it is tractable?avoiding complex multi-period information sets in a dynamic game, and suitably chosen static game can capture important characteristics of the under lying dynamic game.
113
Efficiency of (revenue-)optimal mechanisms
Gagan Aggarwal,Gagan Goel,Aranyak Mehta +2 more
- 06 Jul 2009
TL;DR: In this article, the authors compared the expected efficiency of revenue maximizing (or optimal) mechanisms with that of efficiency maximizing ones, and showed that the efficiency of the revenue maximizing mechanism for selling a single item with (k + loge-1k + 1) bidders is at least as much as the efficiency when bidder valuations are drawn i.i.d. from a Monotone Hazard Rate distribution.
Auctions with revenue guarantees for sponsored search
Zoë Abrams,Arpita Ghosh +1 more
- 12 Dec 2007
TL;DR: A new auction is designed, that incorporates two random sampling auctions, that has a Nash equilibrium, and every equilibrium has revenue at least the larger of the revenues raised by running each of the two auctions individually (assuming bidders bid truthfully when doing so is a utility maximizing strategy).
References
Optimal Auction Design
TL;DR: Optimal auctions are derived for a wide class of auction design problems when the seller has imperfect information about how much the buyers might be willing to pay for the object.
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Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords
TL;DR: In this article, the authors investigate the generalized second-price (GSP) auction, a new mechanism used by search engines to sell online advertising, and show that it has a unique equilibrium, with the same payoffs to all players as the dominant strategy equilibrium of VCG.
•Posted Content
Auctions Versus Negotiations
Jeremy Bulow,Paul Klemperer +1 more
TL;DR: In this paper, the authors show that the auction is always preferable when bidders' signals are independent, under reasonable assumptions that the value of negotiating skill is small relative to value of additional competition.
AdWords and generalized online matching
TL;DR: The notion of a tradeoff revealing LP is introduced and used to derive two optimal algorithms achieving competitive ratios of 1-1/e for this problem of online bipartite matching.
Truthful auctions for pricing search keywords
Gagan Aggarwal,Ashish Goel,Rajeev Motwani +2 more
- 11 Jun 2006
TL;DR: This work presents a truthful auction for pricing advertising slots on a web-page assuming that advertisements for different merchants must be ranked in decreasing order of their (weighted) bids.