Mechanism Design for Mixed Bidders

Yoram Bachrach, Sofia Ceppi, Ian A Kash, Peter Key, Mohammad Reza Khani

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract / Description of output

The Generalized Second Price (GSP) auction has appealing properties when ads are simple (text based and identical in size), but does not generalize to richer ad settings, whereas truthful mechanisms such as VCG do. However, a straight switch from GSP to VCG incurs significant revenue loss for the search engine. We introduce a transitional mechanism which encourages advertisers to update their bids to their valuations, while mitigating revenue loss.In this setting, it is easier to propose first a payment function rathert han an allocation function, so we give a general framework which guarantees incentive compatibility by requiring that the payment functions satisfy two specific properties. Finally, we analyze the revenue impacts of our mechanism on a sample of Bing data.
Original languageEnglish
Title of host publicationWWW '16 Proceedings of the 25th International Conference on World Wide Web
Number of pages20
ISBN (Print)978-1-4503-4143-1
Publication statusPublished - 2016
Event25th International Conference Companion on World Wide Web - Montreal, Canada
Duration: 11 Apr 201615 Apr 2016


Conference25th International Conference Companion on World Wide Web
Abbreviated titleWWW 2016
Internet address


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