Repeated Budgeted Second Price Ad Auction

  • Asaph Arnon
  • Yishay Mansour
Conference paper

DOI: 10.1007/978-3-642-24829-0_3

Volume 6982 of the book series Lecture Notes in Computer Science (LNCS)
Cite this paper as:
Arnon A., Mansour Y. (2011) Repeated Budgeted Second Price Ad Auction. In: Persiano G. (eds) Algorithmic Game Theory. SAGT 2011. Lecture Notes in Computer Science, vol 6982. Springer, Berlin, Heidelberg

Abstract

Our main goal is to abstract existing repeated sponsored search ad auction mechanisms which includes budgets, and study their equilibrium and dynamics. Our abstraction has multiple agents biding repeatedly for multiple identical items (such as impressions in an ad auction). The agents are budget limited and have a value for per item. We abstract the repeated interaction as a one-shot game, which we call budget auction, where agents submit a bid and a budget, and then items are sold by a sequential second price auction. Once an agent exhausts its budget it does not participate in the proceeding auctions.

Our main result is that if agents bid conservatively (never bid above their value) then there always exists a pure Nash equilibrium. We also study simple dynamics of repeated budget auctions, showing their convergence to a Nash equilibrium for two agents and for multiple agents with identical budgets.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  • Asaph Arnon
    • 1
  • Yishay Mansour
    • 2
  1. 1.School of Computer scienceTel Aviv UniversityIsrael
  2. 2.GoogleTel AvivIsrael