Abstract
Most sponsored search auctions use the Generalized Second Price (GSP) rule. Given the GSP rule, they try to give an optimal allocation, an easy task when the only need is to allocate ads to slots. However, when other practical conditions must be fulfilled –such as budget constraints, exploration of the performance of new ads, etc.– optimal allocations are hard to obtain. We provide a method to optimally allocate ads to slots under the practical conditions mentioned above. Our auctions are stochastic, and can be applied in tandem with different pricing rules, among which we highlight two: an intuitive generalization of GSP and VCG payments.
This research was funded by a Yahoo! Research Alliance Grant, and in part by UBACYT project X436 “Algoritmos de selección y asignación y mecanismos de pago para la publicidad online en Internet”.
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Feuerstein, E., Heiber, P.A., Lopez-Rosenfeld, M., Mydlarz, M. (2009). Optimal Auctions Capturing Constraints in Sponsored Search. In: Goldberg, A.V., Zhou, Y. (eds) Algorithmic Aspects in Information and Management. AAIM 2009. Lecture Notes in Computer Science, vol 5564. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-02158-9_17
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DOI: https://doi.org/10.1007/978-3-642-02158-9_17
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