Equilibrium analysis of dynamic bidding in sponsored search auctions

Yevgeniy Vorobeychik; Daniel M. Reeves

doi:10.1007/978-3-540-77105-0_17

Equilibrium analysis of dynamic bidding in sponsored search auctions

Yevgeniy Vorobeychik
, Daniel M. Reeves

Department of Computer Science & Engineering

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

6 Scopus citations

Abstract

We analyze symmetric pure strategy equilibria in dynamic sponsored search auction games using simulations by restricting the strategies to several in a class introduced by Cary et al. [1]. We show that a particular convergent strategy also exhibits high stability to deviations. On the other hand, a strategy which yields high payoffs to all players is not sustainable in equilibrium play. Additionally, we analyze a repeated game in which each stage is a static complete-information sponsored search game. In this setting, we demonstrate a collusion strategy which yields high payoffs to all players and empirically show it to be sustainable over a range of settings.

Original language	English
Title of host publication	Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings
Publisher	Springer Verlag
Pages	155-166
Number of pages	12
ISBN (Print)	9783540771043
DOIs	https://doi.org/10.1007/978-3-540-77105-0_17
State	Published - 2007
Event	3rd International Workshop on Internet and Network Economics, WINE 2007 - San Diego, CA, United States Duration: Dec 12 2007 → Dec 14 2007

Publication series

Name	Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume	4858 LNCS
ISSN (Print)	0302-9743
ISSN (Electronic)	1611-3349

Conference

Conference	3rd International Workshop on Internet and Network Economics, WINE 2007
Country/Territory	United States
City	San Diego, CA
Period	12/12/07 → 12/14/07

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10.1007/978-3-540-77105-0_17

Cite this

Vorobeychik, Y., & Reeves, D. M. (2007). Equilibrium analysis of dynamic bidding in sponsored search auctions. In Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings (pp. 155-166). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 4858 LNCS). Springer Verlag. https://doi.org/10.1007/978-3-540-77105-0_17

Vorobeychik, Yevgeniy ; Reeves, Daniel M. / Equilibrium analysis of dynamic bidding in sponsored search auctions. Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings. Springer Verlag, 2007. pp. 155-166 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)).

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title = "Equilibrium analysis of dynamic bidding in sponsored search auctions",

abstract = "We analyze symmetric pure strategy equilibria in dynamic sponsored search auction games using simulations by restricting the strategies to several in a class introduced by Cary et al. [1]. We show that a particular convergent strategy also exhibits high stability to deviations. On the other hand, a strategy which yields high payoffs to all players is not sustainable in equilibrium play. Additionally, we analyze a repeated game in which each stage is a static complete-information sponsored search game. In this setting, we demonstrate a collusion strategy which yields high payoffs to all players and empirically show it to be sustainable over a range of settings.",

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series = "Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)",

publisher = "Springer Verlag",

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booktitle = "Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings",

note = "3rd International Workshop on Internet and Network Economics, WINE 2007 ; Conference date: 12-12-2007 Through 14-12-2007",

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Vorobeychik, Y & Reeves, DM 2007, Equilibrium analysis of dynamic bidding in sponsored search auctions. in Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings. Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics), vol. 4858 LNCS, Springer Verlag, pp. 155-166, 3rd International Workshop on Internet and Network Economics, WINE 2007, San Diego, CA, United States, 12/12/07. https://doi.org/10.1007/978-3-540-77105-0_17

Equilibrium analysis of dynamic bidding in sponsored search auctions. / Vorobeychik, Yevgeniy; Reeves, Daniel M.
Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings. Springer Verlag, 2007. p. 155-166 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 4858 LNCS).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

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N2 - We analyze symmetric pure strategy equilibria in dynamic sponsored search auction games using simulations by restricting the strategies to several in a class introduced by Cary et al. [1]. We show that a particular convergent strategy also exhibits high stability to deviations. On the other hand, a strategy which yields high payoffs to all players is not sustainable in equilibrium play. Additionally, we analyze a repeated game in which each stage is a static complete-information sponsored search game. In this setting, we demonstrate a collusion strategy which yields high payoffs to all players and empirically show it to be sustainable over a range of settings.

AB - We analyze symmetric pure strategy equilibria in dynamic sponsored search auction games using simulations by restricting the strategies to several in a class introduced by Cary et al. [1]. We show that a particular convergent strategy also exhibits high stability to deviations. On the other hand, a strategy which yields high payoffs to all players is not sustainable in equilibrium play. Additionally, we analyze a repeated game in which each stage is a static complete-information sponsored search game. In this setting, we demonstrate a collusion strategy which yields high payoffs to all players and empirically show it to be sustainable over a range of settings.

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Vorobeychik Y, Reeves DM. Equilibrium analysis of dynamic bidding in sponsored search auctions. In Internet and Network Economics - Third International Workshop, WINE 2007, Proceedings. Springer Verlag. 2007. p. 155-166. (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)). doi: 10.1007/978-3-540-77105-0_17

Equilibrium analysis of dynamic bidding in sponsored search auctions

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