Abstract
The Generalized Second Price (GSP) auction used typically to model sponsored search auctions does not include the notion of budget constraints, which is present in practice. Motivated by this, we introduce the different variants of GSP auctions that take budgets into account in natural ways. We examine their stability by focusing on the existence of Nash equilibria and envy-free assignments. We highlight the differences between these mechanisms and find that only some of them exhibit both notions of stability. This shows the importance of carefully picking the right mechanism to ensure stable outcomes in the presence of budgets.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Arnon, A., Mansour, Y.: Repeated budgeted second price ad auction. In: Persiano, G. (ed.) SAGT 2011. LNCS, vol. 6982, pp. 7–18. Springer, Heidelberg (2011)
Ashlagi, I., Braverman, M., Hassidim, A., Lavi, R., Tennenholtz, M.: Position auctions with budgets: existence and uniqueness. B.E. Journal of Theoretical Economics Advances (2013) (to appear)
Ausubel, L.M.: An efficient ascending-bid auction for multiple objects. The American Economic Review 94(5), 1452–1475 (2004)
Borgs, C., Chayes, J., Immorlica, N., Mahdian, M., Saberi, A.: Multi-unit auctions with budget-constrained bidders. In: ACM Conference on Electronic Commerce, EC, pp. 44–51 (2005)
Caragiannis, I., Kaklamanis, K., Kanellopoulos, P., Kyropoulou, M., Lucier, B., Paes Leme, R., Tardos, E.: On the efficiency of equilibria in generalized second price auctions. arxiv:1201.6429 (2012)
Zhou, Y., Chakrabarty, D., Lukose, R.: Budget constrained bidding in keyword auctions and online knapsack problems. In: Papadimitriou, C., Zhang, S. (eds.) WINE 2008. LNCS, vol. 5385, pp. 566–576. Springer, Heidelberg (2008)
Charles, D., Chakrabarty, D., Chickering, M., Devanur, N.R., Wang, L.: Budget smoothing for internet ad auctions: a game theoretic approach. In: Proceedings of the Fourteenth ACM Conference on Electronic Commerce, EC 2013, pp. 163–180. ACM, New York (2013), http://doi.acm.org/10.1145/2482540.2482583
Christodoulou, G., Kovács, A., Schapira, M.: Bayesian combinatorial auctions. In: Aceto, L., Damgård, I., Goldberg, L.A., Halldórsson, M.M., Ingólfsdóttir, A., Walukiewicz, I. (eds.) ICALP 2008, Part I. LNCS, vol. 5125, pp. 820–832. Springer, Heidelberg (2008)
Colini-Baldeschi, R., Henzinger, M., Leonardi, S., Starnberger, M.: On multiple keyword sponsored search auctions with budgets. In: Czumaj, A., Mehlhorn, K., Pitts, A., Wattenhofer, R. (eds.) ICALP 2012, Part II. LNCS, vol. 7392, pp. 1–12. Springer, Heidelberg (2012)
Dobzinski, S., Lavi, R., Nisan, N.: Multi-unit auctions with budget limits. In: Proceedings of the 2008 49th Annual IEEE Symposium on Foundations of Computer Science, FOCS 2008, pp. 260–269. IEEE Computer Society, Washington (2008), http://dx.doi.org/10.1109/FOCS.2008.39
Edelman, B., Ostrovsky, M., Schwarz, M.: Internet advertising and the generalized second-price auction: Selling billions of dollars worth of keywords. The American Economic Review 97(1), 242–259 (2007)
Feldman, J., Muthukrishnan, S., Pal, M., Stein, C.: Budget optimization in search-based advertising auctions. In: ACM Conference on Electronic Commerce, EC, pp. 40–49 (2007)
Fiat, A., Leonardi, S., Saia, J., Sankowski, P.: Single valued combinatorial auctions with budgets. In: Proceedings of the 12th ACM Conference on Electronic Commerce, EC 2011, pp. 223–232. ACM, New York (2011), http://doi.acm.org/10.1145/1993574.1993609
Goel, G., Mirrokni, V.S., Leme, R.P.: Polyhedral clinching auctions and the adwords polytope. In: ACM Symposium on Theory of Computing, STOC, pp. 107–122 (2012)
Lahaie, S., Pennock, D., Saberi, A., Vohra, R.: Sponsored search auctions. In: Nisan, N., Roughgarden, T., Tardos, E., Vazirani, V. (eds.) Algorithmic Game Theory, ch. 28, pp. 699–716. Cambridge University Press (2007)
Lahaie, S., Pennock, D.: Revenue analysis of a family of ranking rules for keyword auctions. In: Proc. ACM Conference on Electronic Commerce, EC, San Diego, California, USA, pp. 50–56 (June 2007)
Maillé, P., Markakis, E., Naldi, M., Stamoulis, G.D., Tuffin, B.: Sponsored search auctions: an overview of research with emphasis on game theoretic aspects. Electronic Commerce Research 12(3), 265–300 (2012)
Syrgkanis, V., Tardos, É.: Composable and efficient mechanisms. In: ACM Symposium on Theory of Computing, STOC 2013, pp. 211–220 (2013)
Varian, H.: Position auctions. International Journal of Industrial Organization 25, 1163–1178 (2005)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2014 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Díaz, J., Giotis, I., Kirousis, L., Markakis, E., Serna, M. (2014). On the Stability of Generalized Second Price Auctions with Budgets. In: Pardo, A., Viola, A. (eds) LATIN 2014: Theoretical Informatics. LATIN 2014. Lecture Notes in Computer Science, vol 8392. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-54423-1_60
Download citation
DOI: https://doi.org/10.1007/978-3-642-54423-1_60
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-54422-4
Online ISBN: 978-3-642-54423-1
eBook Packages: Computer ScienceComputer Science (R0)