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Incentivizing advertiser networks to submit multiple bids

Author

Listed:
  • Patrick Hummel

    (Google Inc.)

  • R. Preston McAfee

    (Microsoft Corp.)

  • Sergei Vassilvitskii

    (Google Inc.)

Abstract

This paper illustrates a method for making side payments to advertiser networks that creates an incentive for the advertiser networks to submit the second-highest bids they received to an ad exchange and simultaneously ensures that the publishers will make more money on average in the short run as a result of adopting this scheme. We also illustrate how this payment scheme affects publisher payoffs in the long run after advertisers have a chance to modify their strategies in response to the changed incentives of the mechanism.

Suggested Citation

  • Patrick Hummel & R. Preston McAfee & Sergei Vassilvitskii, 2016. "Incentivizing advertiser networks to submit multiple bids," International Journal of Game Theory, Springer;Game Theory Society, vol. 45(4), pages 1031-1052, November.
    • Handle: RePEc:spr:jogath:v:45:y:2016:i:4:d:10.1007_s00182-015-0501-y
    DOI: 10.1007/s00182-015-0501-y
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    References listed on IDEAS

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    1. Santiago R. Balseiro & Jon Feldman & Vahab Mirrokni & S. Muthukrishnan, 2014. "Yield Optimization of Display Advertising with Ad Exchange," Management Science, INFORMS, vol. 60(12), pages 2886-2907, December.
    2. Santiago R. Balseiro & Omar Besbes & Gabriel Y. Weintraub, 2015. "Repeated Auctions with Budgets in Ad Exchanges: Approximations and Design," Management Science, INFORMS, vol. 61(4), pages 864-884, April.
    3. Arieh Gavious & Yizhaq Minchuk, 2014. "Ranking asymmetric auctions," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(2), pages 369-393, May.
    4. Vlad Mares & Jeroen Swinkels, 2014. "Comparing first and second price auctions with asymmetric bidders," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(3), pages 487-514, August.
    5. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
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    Cited by:

    1. Gagan Aggarwal & Kshipra Bhawalkar & Guru Guruganesh & Andres Perlroth, 2021. "Maximizing revenue in the presence of intermediaries," Papers 2111.10472, arXiv.org.

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