Designing online auctions with past performance information

De Liu; Jianqing Chen

doi:10.1016/j.dss.2005.10.012

Designing online auctions with past performance information

De Liu, Jianqing Chen

Information and Decision Sciences

Research output: Contribution to journal › Article › peer-review

50 Scopus citations

Abstract

We investigate the value of past performance information in the context of keyword advertising auctions, where advertisers differ both in valuation-per-click and in the numbers of clicks they can generate (their performance). We focus on weighted unit-price-contract (UPC) auctions, in which bidders bid unit prices and pay accordingly if they win, and their bids are weighted by factors based on their own past performance. We characterize the efficient and the revenue-maximizing weighting factors and apply our framework to study Yahoo!'s and Google's auction designs, each of which can be viewed as a special case of weighted UPC auctions.

Original language	English (US)
Pages (from-to)	1307-1320
Number of pages	14
Journal	Decision Support Systems
Volume	42
Issue number	3
DOIs	https://doi.org/10.1016/j.dss.2005.10.012
State	Published - Dec 1 2006

Keywords

Google
Keyword advertising
Multi-dimensional values
Search engine
UPC auctions

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10.1016/j.dss.2005.10.012

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abstract = "We investigate the value of past performance information in the context of keyword advertising auctions, where advertisers differ both in valuation-per-click and in the numbers of clicks they can generate (their performance). We focus on weighted unit-price-contract (UPC) auctions, in which bidders bid unit prices and pay accordingly if they win, and their bids are weighted by factors based on their own past performance. We characterize the efficient and the revenue-maximizing weighting factors and apply our framework to study Yahoo!'s and Google's auction designs, each of which can be viewed as a special case of weighted UPC auctions.",

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Designing online auctions with past performance information

Abstract

Keywords

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