7,096 research outputs found
Multi-keyword multi-click advertisement option contracts for sponsored search
In sponsored search, advertisement (abbreviated ad) slots are usually sold by
a search engine to an advertiser through an auction mechanism in which
advertisers bid on keywords. In theory, auction mechanisms have many desirable
economic properties. However, keyword auctions have a number of limitations
including: the uncertainty in payment prices for advertisers; the volatility in
the search engine's revenue; and the weak loyalty between advertiser and search
engine. In this paper we propose a special ad option that alleviates these
problems. In our proposal, an advertiser can purchase an option from a search
engine in advance by paying an upfront fee, known as the option price. He then
has the right, but no obligation, to purchase among the pre-specified set of
keywords at the fixed cost-per-clicks (CPCs) for a specified number of clicks
in a specified period of time. The proposed option is closely related to a
special exotic option in finance that contains multiple underlying assets
(multi-keyword) and is also multi-exercisable (multi-click). This novel
structure has many benefits: advertisers can have reduced uncertainty in
advertising; the search engine can improve the advertisers' loyalty as well as
obtain a stable and increased expected revenue over time. Since the proposed ad
option can be implemented in conjunction with the existing keyword auctions,
the option price and corresponding fixed CPCs must be set such that there is no
arbitrage between the two markets. Option pricing methods are discussed and our
experimental results validate the development. Compared to keyword auctions, a
search engine can have an increased expected revenue by selling an ad option.Comment: Chen, Bowei and Wang, Jun and Cox, Ingemar J. and Kankanhalli, Mohan
S. (2015) Multi-keyword multi-click advertisement option contracts for
sponsored search. ACM Transactions on Intelligent Systems and Technology, 7
(1). pp. 1-29. ISSN: 2157-690
Mutual Trust and Cooperation in the Evolutionary Hawks-Doves Game
Using a new dynamical network model of society in which pairwise interactions
are weighted according to mutual satisfaction, we show that cooperation is the
norm in the Hawks-Doves game when individuals are allowed to break ties with
undesirable neighbors and to make new acquaintances in their extended
neighborhood. Moreover, cooperation is robust with respect to rather strong
strategy perturbations. We also discuss the empirical structure of the emerging
networks, and the reasons that allow cooperators to thrive in the population.
Given the metaphorical importance of this game for social interaction, this is
an encouraging positive result as standard theory for large mixing populations
prescribes that a certain fraction of defectors must always exist at
equilibrium.Comment: 23 pages 12 images, to appea
Sorting versus screening: Search frictions and competing mechanisms
In a market where sellers compete by posting trading mechanisms, we allow for a general search technology and show that its features crucially affect the equilibrium mechanism. Price posting prevails when meetings are rival, i.e., when a meeting by one buyer reduces another buyer’s meeting probability. Under price posting buyers reveal their type by sorting ex ante. Only if the meeting technology is sufficiently non-rival, price posting is not an equilibrium. Multiple buyer types then visit the same sellers who screen ex post through auctions
Differential evolution based bi-level programming algorithm for computing normalized nash equilibrium
The Generalised Nash Equilibrium Problem (GNEP) is a Nash game with the distinct feature that the feasible strategy set of a player depends on the strategies chosen by all her opponents in the game. This characteristic distinguishes the GNEP from a conventional Nash Game. These shared constraints on each player’s decision space, being dependent on decisions of others in the game, increases its computational difficulty. A special solution of the GNEP is the Nash Normalized Equilibrium which can be obtained by transforming the GNEP into a bi-level program with an optimal value of zero in the upper level. In this paper, we propose a Differential Evolution based Bi-Level Programming algorithm embodying Stochastic Ranking to handle constraints (DEBLP-SR) to solve the resulting bi-level programming formulation. Numerical examples of GNEPs drawn from the literature are used to illustrate the performance of the proposed algorithm
Information Aggregation in Exponential Family Markets
We consider the design of prediction market mechanisms known as automated
market makers. We show that we can design these mechanisms via the mold of
\emph{exponential family distributions}, a popular and well-studied probability
distribution template used in statistics. We give a full development of this
relationship and explore a range of benefits. We draw connections between the
information aggregation of market prices and the belief aggregation of learning
agents that rely on exponential family distributions. We develop a very natural
analysis of the market behavior as well as the price equilibrium under the
assumption that the traders exhibit risk aversion according to exponential
utility. We also consider similar aspects under alternative models, such as
when traders are budget constrained
An evolutionary game model for behavioral gambit of loyalists: Global awareness and risk-aversion
We study the phase diagram of a minority game where three classes of agents
are present. Two types of agents play a risk-loving game that we model by the
standard Snowdrift Game. The behaviour of the third type of agents is coded by
{\em indifference} w.r.t. the game at all: their dynamics is designed to
account for risk-aversion as an innovative behavioral gambit. From this point
of view, the choice of this solitary strategy is enhanced when innovation
starts, while is depressed when it becomes the majority option. This implies
that the payoff matrix of the game becomes dependent on the global awareness of
the agents measured by the relevance of the population of the indifferent
players. The resulting dynamics is non-trivial with different kinds of phase
transition depending on a few model parameters. The phase diagram is studied on
regular as well as complex networks
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