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Internet search companies sell advertisement slots based on users' search queries via an auction. Advertisers have to determine how to place bids on the keywords of their interest in order to maximize their return for a given budget: this…

Data Structures and Algorithms · Computer Science 2007-09-24 S. Muthukrishnan , Martin Pal , Zoya Svitkina

The design of revenue-maximizing combinatorial auctions, i.e. multi-item auctions over bundles of goods, is one of the most fundamental problems in computational economics, unsolved even for two bidders and two items for sale. In the…

Machine Learning · Computer Science 2016-06-15 Maria-Florina Balcan , Tuomas Sandholm , Ellen Vitercik

Since 2019, most ad exchanges and sell-side platforms (SSPs), in the online advertising industry, shifted from second to first price auctions. Due to the fundamental difference between these auctions, demand-side platforms (DSPs) have had…

Sponsored search is an important monetization channel for search engines, in which an auction mechanism is used to select the ads shown to users and determine the prices charged from advertisers. There have been several pieces of work in…

Computer Science and Game Theory · Computer Science 2014-06-05 Di He , Wei Chen , Liwei Wang , Tie-Yan Liu

We consider the classical mathematical economics problem of {\em Bayesian optimal mechanism design} where a principal aims to optimize expected revenue when allocating resources to self-interested agents with preferences drawn from a known…

Computer Science and Game Theory · Computer Science 2010-01-15 Shuchi Chawla , Jason Hartline , David Malec , Balasubramanian Sivan

Auctions are important mechanisms extensively implemented in various markets, e.g., search engines' keyword auctions, antique auctions, etc. Finding an optimal auction mechanism is extremely difficult due to the constraints of imperfect…

Machine Learning · Computer Science 2025-07-28 Jiayin Liu , Chenglong Zhang

Posted price mechanisms are prevalent in allocating goods within online marketplaces due to their simplicity and practical efficiency. We explore a fundamental scenario where buyers' valuations are independent and identically distributed,…

Computer Science and Game Theory · Computer Science 2025-05-26 José Correa , Vasilis Livanos , Dana Pizarro , Victor Verdugo

A standard result from auction theory is that bidding truthfully in a second price auction is a weakly dominant strategy. The result, however, does not apply in the presence of Cost Per Action (CPA) constraints. Such constraints exist, for…

Computer Science and Game Theory · Computer Science 2019-05-13 Benjamin Heymann

Combinatorial auctions (CA) are a well-studied area in algorithmic mechanism design. However, contrary to the standard model, empirical studies suggest that a bidder's valuation often does not depend solely on the goods assigned to him. For…

Computer Science and Game Theory · Computer Science 2015-10-01 Yun Kuen Cheung , Monika Henzinger , Martin Hoefer , Martin Starnberger

We focus on online second price auctions, where bids are made sequentially, and the winning bidder pays the maximum of the second-highest bid and a seller specified starting price. For many such auctions, the seller does not see all the…

Methodology · Statistics 2026-02-23 Sourav Mukherjee , Ziqian Yang , Rohit K Patra , Kshitij Khare

Online auctions are one of the most fundamental facets of the modern economy and power an industry generating hundreds of billions of dollars a year in revenue. Auction theory has historically focused on the question of designing the best…

Computer Science and Game Theory · Computer Science 2021-09-23 Thomas Nedelec , Clément Calauzènes , Noureddine El Karoui , Vianney Perchet

We examine trade-offs among stakeholders in ad auctions. Our metrics are the revenue for the utility of the auctioneer, the number of clicks for the utility of the users and the welfare for the utility of the advertisers. We show how to…

Computer Science and Game Theory · Computer Science 2014-04-22 Yoram Bachrach , Sofia Ceppi , Ian A. Kash , Peter Key , David Kurokawa

In e-commerce advertising, it is crucial to jointly consider various performance metrics, e.g., user experience, advertiser utility, and platform revenue. Traditional auction mechanisms, such as GSP and VCG auctions, can be suboptimal due…

Computer Science and Game Theory · Computer Science 2021-07-15 Xiangyu Liu , Chuan Yu , Zhilin Zhang , Zhenzhe Zheng , Yu Rong , Hongtao Lv , Da Huo , Yiqing Wang , Dagui Chen , Jian Xu , Fan Wu , Guihai Chen , Xiaoqiang Zhu

We develop a framework for the analysis of large-scale Ad-auctions where adverts are assigned over a continuum of search types. For this pay-per-click market, we provide an efficient mechanism that maximizes social welfare. In particular,…

Computer Science and Game Theory · Computer Science 2016-06-03 Frank Kelly , Peter Key , Neil Walton

Computing market equilibria is an important practical problem for market design, for example in fair division of items. However, computing equilibria requires large amounts of information (typically the valuation of every buyer for every…

Computer Science and Game Theory · Computer Science 2021-09-07 Christian Kroer , Alexander Peysakhovich , Eric Sodomka , Nicolas E. Stier-Moses

We study how standard auction objectives in sponsored search markets change with refinements in the prediction of the relevance (click-through rates) of ads. We study mechanisms that optimize for a convex combination of efficiency and…

Computer Science and Game Theory · Computer Science 2013-02-28 Mukund Sundararajan , Inbal Talgam-Cohen

In many settings, money is a tool of exchange with minimal inherent utility --- agents will spend it in a way that maximizes the value of goods received subject to reasonable constraints, giving only second-order consideration to the…

Computer Science and Game Theory · Computer Science 2018-07-17 Christopher A Wilkens , Ruggiero Cavallo , Rad Niazadeh , Samuel Taggart

In a sponsored search auction, decisions about how to rank ads impose tradeoffs between objectives such as revenue and welfare. In this paper, we examine how these tradeoffs should be made. We begin by arguing that the most natural solution…

Computer Science and Game Theory · Computer Science 2013-04-30 Ben Roberts , Dinan Gunawardena , Ian A. Kash , Peter Key

Classical Bayesian mechanism design relies on the common prior assumption, but such prior is often not available in practice. We study the design of prior-independent mechanisms that relax this assumption: the seller is selling an…

Theoretical Economics · Economics 2024-12-12 Jerry Anunrojwong , Santiago R. Balseiro , Omar Besbes

Traditionally the probabilistic ranking principle is used to rank the search results while the ranking based on expected profits is used for paid placement of ads. These rankings try to maximize the expected utilities based on the user…

Computer Science and Game Theory · Computer Science 2015-03-19 Raju Balakrishnan , Subbarao Kambhampati