scholarly journals Marketing Agencies and Collusive Bidding in Online Ad Auctions

2020 ◽  
Vol 66 (10) ◽  
pp. 4433-4454
Author(s):  
Francesco Decarolis ◽  
Maris Goldmanis ◽  
Antonio Penta
Keyword(s):  
Allocative Efficiency ◽  
The Internet ◽  
Traditional Media ◽  
Vcg Mechanism ◽  
Price Auction ◽  
Second Price Auction ◽  
Generalized Second Price Auction ◽  
Ad Auctions ◽  
Marketing Agency ◽  
The Web

The transition of the advertising market from traditional media to the internet has induced a proliferation of marketing agencies specialized in bidding in the auctions that are used to sell ad space on the web. We analyze how collusive bidding can emerge from bid delegation to a common marketing agency and how this can undermine the revenues and allocative efficiency of both the generalized second-price auction (GSP, used by Google, Microsoft Bing, and Yahoo!) and the Vickrey–Clarke–Groves (VCG) mechanism (used by Facebook). We find that despite its well-known susceptibility to collusion, the VCG mechanism outperforms the GSP auction in terms of both revenues and efficiency. This paper was accepted by Gabriel Weintraub, revenue management and market analytics.

scholarly journals Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords

2007 ◽  
Vol 97 (1) ◽  
pp. 242-259 ◽  
Author(s):  
Benjamin Edelman ◽  
Michael Ostrovsky ◽  
Michael Schwarz
Keyword(s):  
Online Advertising ◽  
Dominant Strategy ◽  
Truth Telling ◽  
Vcg Mechanism ◽  
Strategy Equilibrium ◽  
Ex Post ◽  
Dominant Strategies ◽  
Price Auction ◽  
Second Price Auction ◽  
Generalized Second Price Auction

We investigate the “generalized second-price” (GSP) auction, a new mechanism used by search engines to sell online advertising. Although GSP looks similar to the Vickrey-Clarke-Groves (VCG) mechanism, its properties are very different. Unlike the VCG mechanism, GSP generally does not have an equilibrium in dominant strategies, and truth-telling is not an equilibrium of GSP. To analyze the properties of GSP, we describe the generalized English auction that corresponds to GSP and show that it has a unique equilibrium. This is an ex post equilibrium, with the same payoffs to all players as the dominant strategy equilibrium of VCG. (JEL D44, L81, M37)

scholarly journals The Internet as a Moral Mediator. The Quest for Democracy

1970 ◽  
Vol 4 (2) ◽  
pp. 230-238
Author(s):  
Emanuele Bardone ◽  
Lorenzo Magnani
Keyword(s):  
Information Technology ◽  
The Political ◽  
The Internet ◽  
Sources Of Information ◽  
Traditional Media ◽  
Cognitive Framework ◽  
Access Information ◽  
The Government ◽  
Different Sources ◽  
The Web

Recently the impressive growth of the Web, and the Internet in general, has been considered as a promise that may both challenge and boost our representation of democratic institutions. It is well known that modern democracies are based on the possibility to control and even replace who rules by the force of the best arguments. More generally, the control of the government, and the effectiveness of democracy, is possible, if the citizens can access information. Hence, the promise of the Internet mainly relies on the fact that people may more freely access information, because it seems it cannot be controlled or manipulated by the political power. In the first part of this outline we will depict a cognitive framework to deal with the relationships between Internet and democracy. We shall show that Internet, as an information technology, can be considered as a cognitive and moral mediator; it can provide stories, texts, images, combined with sounds, so that the information fosters not only a cognitive, but also an emotional and moral understanding. In this sense, the Internet represents a kind of redistribution of the moral effort through managing objects and information to overcome the poverty and the unsatisfactory character of the options available. In the last part we will illustrate that Internet, as a moral mediator, may enhance democracy in two respects. First, it affords civic engagement and participation; second, it allows people to face different sources of information so that almost everyone can verify and test the information delivered by traditional media.

An Approach to Co-Dependent Value Based Internet Advertisement Auction

2013 ◽  
Vol 1 (2) ◽  
pp. 1-15 ◽  
Author(s):  
Satoshi Takahashi ◽  
Tokuro Matsuo ◽  
Roger Y. Lee
Keyword(s):  
Service Providers ◽  
Auction Mechanism ◽  
A Value ◽  
Internet Advertisement ◽  
Groves Mechanism ◽  
Price Auction ◽  
Second Price Auction ◽  
Generalized Second Price Auction ◽  
A Company ◽  
Mutually Independent

A structure of the Internet advertisement is that the service providers decide order of placement of many advertisements and advertising fees by auctions when advertisers offer their promotions. It is known that Generalized Second Price Auction (GSP) mechanism is the most efficient auction mechanism of the advertisement auction. Searching engine companies employ GSP mechanism basically. There are a lot of researches on GSP in order to analyze and clarify its feature and advantages. However, these researches assume that traded advertisements are mutually independent. That is means that each advertisement does not influence other advertisements. Also these researches do not consider a value of advertisement, which means some criterions of a name value of a company, effectiveness and an importance, that is dependently each other. This paper proposes a new advertisement auction mechanism based on GSP with considering the value of advertisement. The authors analyze the auctioneer's profit in comparison between normal GSP, normal VCG (Vickrey-Clarke-Groves Mechanism) and their proposed mechanism.

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