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ACMICEC
2007
ACM

Asymptotically optimal repeated auctions for sponsored search

11 years 9 months ago
Asymptotically optimal repeated auctions for sponsored search
We investigate asymptotically optimal keyword auctions, that is, auctions which maximize revenue as the number of bidders grows. We do so under two alternative behavioral assumptions. The first explicitly models the repeated nature of keyword auctions. It introduces a novel assumption on individual bidding, namely that bidders never overbid their value, and bid their actual value if shut out for long enough. Under these conditions we present a broad class of repeated auctions that are asymptotically optimal among all sequential auctions (a superset of repeated auctions). Those auctions have varying payment schemes but share the ranking method. The Google auction belongs to this class, but not the Yahoo auction, and indeed we show that the latter is not asymptotically optimal. (Nonetheless, with some additional distributional assumptions, the Yahoo auction can be shown to belong to a broad category of auctions that are asymptotically optimal among all auction mechanisms that do not rel...
Nicolas S. Lambert, Yoav Shoham
Added 12 Aug 2010
Updated 12 Aug 2010
Type Conference
Year 2007
Where ACMICEC
Authors Nicolas S. Lambert, Yoav Shoham
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