User modeling in position auctions: re-considering the GSP and VCG mechanisms
Proceedings of The 8th International Conference on Autonomous Agents and Multiagent Systems - Volume 1
Computational analysis of perfect-information position auctions
Proceedings of the 10th ACM conference on Electronic commerce
Reserve prices in internet advertising auctions: a field experiment
Proceedings of the 12th ACM conference on Electronic commerce
Proceedings of the 12th ACM conference on Electronic commerce
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We consider the revenue of the Generalized Second Price (GSP) auction, which is one of the most widely used mechanisms for ad auctions. While the standard model of ad auctions implies that the revenue of GSP in equilibrium is at least as high as the revenue of VCG, the literature suggests that it is not strictly higher due to the selection of a natural equilibrium that coincides with the VCG outcome. We propose a randomized modification of the GSP mechanism, which eliminates the low-revenue equilibria of the GSP mechanism under some natural restrictions. The proposed mechanism leads to a higher revenue to the seller.