Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions
نویسندگان
چکیده
منابع مشابه
Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions
In analyses of sponsored search auctions for online advertising, it is customary to model the dynamic game of incomplete information by considering a static games of complete information. This approach is used in Edelman, Ostrovsky and Schwarz (2007) (EOS), Varian (2007), and the subsequent literature. Modeling complex interactions in uncertain environments as games of complete information has ...
متن کاملOptimal Auction Design in a Multi-unit Environment: The Case of Sponsored Search Auctions
We characterize the optimal (revenue maximizing) auction for sponsored search advertising. We show that a search engine’s optimal reserve price is independent of the number of bidders. Using simulations, we consider the changes that result from a search engine’s choice of reserve price and from changes in the number of participating advertisers.
متن کاملOptimal Auctions Capturing Constraints in Sponsored Search
Most sponsored search auctions use the Generalized Second Price (GSP) rule. Given the GSP rule, they try to give an optimal allocation, an easy task when the only need is to allocate ads to slots. However, when other practical conditions must be fulfilled –such as budget constraints, exploration of the performance of new ads, etc.– optimal allocations are hard to obtain. We provide a method to ...
متن کاملEquilibrium Bids in Sponsored Search Auctions: Theory and Evidence∗
This paper presents a game theoretic analysis of the generalized second price auction that Yahoo operates to sell sponsored search listings on its search engine. We present results that indicate that this auction has a multiplicity of Nash equilibria. We also show that weak dominance arguments do not in general select a unique Nash equilibrium. We then analyze bid data assuming that advertisers...
متن کاملEquilibrium Efficiency and Price Complexity in Sponsored Search Auctions
Modern sponsored search auctions are derived from the Generalized Second Price (GSP) auction. Although the GSP auction is not truthful, results by Edelman, Ostrovsky, and Schwarz [7] and Varian [13] give senses in which its outcome is equivalent to that of the truthful and welfaremaximizing VCG mechanism. The first main message of this paper is that these properties are not unique to the GSP au...
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ژورنال
عنوان ژورنال: American Economic Review
سال: 2010
ISSN: 0002-8282
DOI: 10.1257/aer.100.2.597