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Auction mechanisms for demand-side intermediaries in online advertising exchanges

Auction mechanisms for demand-side intermediaries in online advertising exchanges
Auction mechanisms for demand-side intermediaries in online advertising exchanges
Motivated by the online advertising exchange marketplace where demand-side intermediaries conduct local upstream auctions and participate in the exchanges’ real-time auctions, we study the revenue and efficiency effects of three different auction mechanisms for such intermediaries. Specifically, we consider the widely-used first-price sealed-bid auction and two variations of the Vickrey auction (termed pre- and post-award), in a single-exchange single item setting. We show that, for a homogeneous population of intermediaries with captive buyers competing at the exchange, the three mechanisms yield different expected profits for the intermediaries and revenue for the exchange, but a complete ranking for all mechanisms cannot be attained. We also demonstrate that the optimal reserve price of the exchange increases with the number of buyers and/or intermediaries, and that the social welfare decreases, compared to classical auctions without intermediaries. Moreover, we show that pre-award Vickrey auctions are less efficient than the other mechanisms. Finally, we compare the two Vickrey variations in a duopoly setting with non-captive buyers, and show that all buyers always select the post-award mechanism
ad auction, intermediary, auction design, competition
1037-1044
ACM
Stavrogiannis, Lampros C.
08655c3e-a334-4bec-a8a6-3acce9d6ee5b
Gerding, Enrico H.
d9e92ee5-1a8c-4467-a689-8363e7743362
Polukarov, Maria
bd2f0623-9e8a-465f-8b29-851387a64740
Stavrogiannis, Lampros C.
08655c3e-a334-4bec-a8a6-3acce9d6ee5b
Gerding, Enrico H.
d9e92ee5-1a8c-4467-a689-8363e7743362
Polukarov, Maria
bd2f0623-9e8a-465f-8b29-851387a64740

Stavrogiannis, Lampros C., Gerding, Enrico H. and Polukarov, Maria (2014) Auction mechanisms for demand-side intermediaries in online advertising exchanges. In AAMAS '14 Proceedings of the 2014 international conference on Autonomous agents and multi-agent systems. ACM. pp. 1037-1044 .

Record type: Conference or Workshop Item (Paper)

Abstract

Motivated by the online advertising exchange marketplace where demand-side intermediaries conduct local upstream auctions and participate in the exchanges’ real-time auctions, we study the revenue and efficiency effects of three different auction mechanisms for such intermediaries. Specifically, we consider the widely-used first-price sealed-bid auction and two variations of the Vickrey auction (termed pre- and post-award), in a single-exchange single item setting. We show that, for a homogeneous population of intermediaries with captive buyers competing at the exchange, the three mechanisms yield different expected profits for the intermediaries and revenue for the exchange, but a complete ranking for all mechanisms cannot be attained. We also demonstrate that the optimal reserve price of the exchange increases with the number of buyers and/or intermediaries, and that the social welfare decreases, compared to classical auctions without intermediaries. Moreover, we show that pre-award Vickrey auctions are less efficient than the other mechanisms. Finally, we compare the two Vickrey variations in a duopoly setting with non-captive buyers, and show that all buyers always select the post-award mechanism

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StavrogiannisGerdingPolukarovAAMAS2014.pdf - Author's Original
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More information

e-pub ahead of print date: 12 March 2014
Published date: May 2014
Venue - Dates: 13th International Conference on Autonomous Agents and Multi-Agent Systems, Paris, France, 2014-05-05 - 2014-05-09
Keywords: ad auction, intermediary, auction design, competition
Organisations: Agents, Interactions & Complexity

Identifiers

Local EPrints ID: 363061
URI: http://eprints.soton.ac.uk/id/eprint/363061
PURE UUID: b42e0a95-4ca9-4da3-93ca-ad6a1799ddb4
ORCID for Enrico H. Gerding: ORCID iD orcid.org/0000-0001-7200-552X

Catalogue record

Date deposited: 20 Mar 2014 13:31
Last modified: 19 Dec 2019 01:36

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