14 research outputs found
Expressiveness and Robustness of First-Price Position Auctions
Since economic mechanisms are often applied to very different instances of
the same problem, it is desirable to identify mechanisms that work well in a
wide range of circumstances. We pursue this goal for a position auction setting
and specifically seek mechanisms that guarantee good outcomes under both
complete and incomplete information. A variant of the generalized first-price
mechanism with multi-dimensional bids turns out to be the only standard
mechanism able to achieve this goal, even when types are one-dimensional. The
fact that expressiveness beyond the type space is both necessary and sufficient
for this kind of robustness provides an interesting counterpoint to previous
work on position auctions that has highlighted the benefits of simplicity. From
a technical perspective our results are interesting because they establish
equilibrium existence for a multi-dimensional bid space, where standard
techniques break down. The structure of the equilibrium bids moreover provides
an intuitive explanation for why first-price payments may be able to support
equilibria in a wider range of circumstances than second-price payments
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Expressiveness And Robustness of First-Price Position Auctions
Since economic mechanisms are often applied to very different instances of the same problem, it is desirable to identify mechanisms that work well in a wide range of circumstances. We pursue this goal for a position auction setting and specifically seek mechanisms that guarantee good outcomes under both complete and incomplete information. A variant of the generalized first-price mechanism with multi-dimensional bids turns out to be the only standard mechanism able to achieve this goal, even when types are one-dimensional. The fact that expressiveness beyond the type space is both necessary and sufficient for this kind of robustness provides an interesting counterpoint to previous work on position auctions that has highlighted the benefits of simplicity. From a technical perspective our results are interesting because they establish equilibrium existence for a multi-dimensional bid space, where standard techniques break down. The structure of the equilibrium bids moreover provides an intuitive explanation for why first-price payments may be able to support equilibria in a wider range of circumstances than second-price payments.Engineering and Applied Science
GSP with General Independent Click-Through-Rates
The popular generalized second price (GSP) auction for sponsored search is
built upon a separable model of click-through-rates that decomposes the
likelihood of a click into the product of a "slot effect" and an "advertiser
effect" --- if the first slot is twice as good as the second for some bidder,
then it is twice as good for everyone. Though appealing in its simplicity, this
model is quite suspect in practice. A wide variety of factors including
externalities and budgets have been studied that can and do cause it to be
violated. In this paper we adopt a view of GSP as an iterated second price
auction (see, e.g., Milgrom 2010) and study how the most basic violation of
separability --- position dependent, arbitrary public click-through-rates that
do not decompose --- affects results from the foundational analysis of GSP
(Varian 2007, Edelman et al. 2007). For the two-slot setting we prove that for
arbitrary click-through-rates, for arbitrary bidder values, an efficient
pure-strategy equilibrium always exists; however, without separability there
always exist values such that the VCG outcome and payments cannot be realized
by any bids, in equilibrium or otherwise. The separability assumption is
therefore necessary in the two-slot case to match the payments of VCG but not
for efficiency. We moreover show that without separability, generic existence
of efficient equilibria is sensitive to the choice of tie-breaking rule, and
when there are more than two slots, no (bid-independent) tie-breaking rule
yields the positive result. In light of this we suggest alternative mechanisms
that trade the simplicity of GSP for better equilibrium properties when there
are three or more slots
Parallel Experimentation in a Competitive Advertising Marketplace
When multiple firms are simultaneously running experiments on a platform, the
treatment effects for one firm may depend on the experimentation policies of
others. This paper presents a set of causal estimands that are relevant to such
an environment. We also present an experimental design that is suitable for
facilitating experimentation across multiple competitors in such an
environment. Together, these can be used by a platform to run experiments "as a
service," on behalf of its participating firms. We show that the causal
estimands we develop are identified nonparametrically by the variation induced
by the design, and present two scalable estimators that help measure them in
typical high-dimensional situations. We implement the design on the advertising
platform of JD.com, an eCommerce company, which is also a publisher of digital
ads in China. We discuss how the design is engineered within the platform's
auction-driven ad-allocation system, which is typical of modern, digital
advertising marketplaces. Finally, we present results from a parallel
experiment involving 16 advertisers and millions of JD.com users. These results
showcase the importance of accommodating a role for interactions across
experimenters and demonstrates the viability of the framework