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Externalities among Advertisers in Sponsored Search

  • Conference paper
Algorithmic Game Theory (SAGT 2011)

Part of the book series: Lecture Notes in Computer Science ((LNISA,volume 6982))

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Abstract

We introduce a novel computational model for single-keyword auctions in sponsored search, which models explicitly externalities among advertisers, an aspect that has not been fully reflected in the existing models, and is known to affect the behavior of real advertisers. Our model takes into account both positive and negative correlations between any pair of advertisers, so that the click-through rate of an ad depends on the identity, relative order and distance of other ads appearing in the advertisements list. In the proposed model we present several computational results concerning the Winner Determination problem for Social Welfare maximization. These include hardness of approximation and polynomial time exact and approximation algorithms. We conclude with an evaluation of the Generalized Second Price mechanism in presence of externalities.

Research partially supported by an NTUA Basic Research Grant (PEBE 2009), EPSRC grant EP/F069502/1, and DFG grant Kr 2332/1-3 within Emmy Noether Program.

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Fotakis, D., Krysta, P., Telelis, O. (2011). Externalities among Advertisers in Sponsored Search. In: Persiano, G. (eds) Algorithmic Game Theory. SAGT 2011. Lecture Notes in Computer Science, vol 6982. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-24829-0_11

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  • DOI: https://doi.org/10.1007/978-3-642-24829-0_11

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-24828-3

  • Online ISBN: 978-3-642-24829-0

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