Advertisement allocation for generalized second-pricing schemes

Authors:
Ashish Goel;Mohammad Mahdian;Hamid Nazerzadeh;Amin Saberi
Affiliations:
Management Science and Engineering Department, Stanford University, United States;Yahoo! Research, United States;Microsoft Research, 1 Memorial Dr., Cambridge, MA, 02142, United States;Management Science and Engineering Department, Stanford University, United States
Venue:
Operations Research Letters
Year:
2010

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Abstract

Recently, there has been a surge of interest in algorithms that allocate advertisement space in an online revenue-competitive manner. Most such algorithms, however, assume a pay-as-you-bid pricing scheme. In this paper, we study the query allocation problem where the ad space is priced using the well-known and widely used generalized second-price (GSP) scheme. We observe that the previous algorithms fail to achieve a bounded competitive ratio under the GSP scheme. On the positive side, we present online constant-competitive algorithms for the problem.