Sponsored search advertising is a significant revenue source for search engines. To ameliorate revenues, search engines often set fixed or variable reserve price to in influence advertisers＇ bidding. This paper studi...Sponsored search advertising is a significant revenue source for search engines. To ameliorate revenues, search engines often set fixed or variable reserve price to in influence advertisers＇ bidding. This paper studies the optimal reserve price for a generalized second-price auction （GSP） under both static and dynamic settings. We show that if advertisers＇ per-click value has an increasing generalized failure rate, the search engine＇s revenue rate is quasi-concave and hence there exists an optimal reserve price under both settings. Different from a static GSP auction where the optimal reserve price is proved to be constant, in a dynamic setting the optimal reserve price is dependent on not only advertisers＇ per-click values, but also the number of ad links sold. A search engine should gradually raise reserve price as more qualified advertisers arrive, and maintain the same threshold after all first-page positions are occupied.展开更多
In this paper we reanalyze Said’s(2011) work by retaining all his assumptions except that we use the first-price auction to sell differentiated goods to buyers in dynamic markets instead of the second-price auction. ...In this paper we reanalyze Said’s(2011) work by retaining all his assumptions except that we use the first-price auction to sell differentiated goods to buyers in dynamic markets instead of the second-price auction. We conclude that except for the expression of the equilibrium bidding strategy, all the results for the first-price auction are exactly the same as the corresponding ones for the second-price auction established by Said(2011). This implies that the well-known "revenue equivalence theorem"holds true for Said’s(2011) dynamic model setting.展开更多
文摘Sponsored search advertising is a significant revenue source for search engines. To ameliorate revenues, search engines often set fixed or variable reserve price to in influence advertisers＇ bidding. This paper studies the optimal reserve price for a generalized second-price auction （GSP） under both static and dynamic settings. We show that if advertisers＇ per-click value has an increasing generalized failure rate, the search engine＇s revenue rate is quasi-concave and hence there exists an optimal reserve price under both settings. Different from a static GSP auction where the optimal reserve price is proved to be constant, in a dynamic setting the optimal reserve price is dependent on not only advertisers＇ per-click values, but also the number of ad links sold. A search engine should gradually raise reserve price as more qualified advertisers arrive, and maintain the same threshold after all first-page positions are occupied.
基金Supported by the National Natural Science Foundation of China(71171052)
文摘In this paper we reanalyze Said’s(2011) work by retaining all his assumptions except that we use the first-price auction to sell differentiated goods to buyers in dynamic markets instead of the second-price auction. We conclude that except for the expression of the equilibrium bidding strategy, all the results for the first-price auction are exactly the same as the corresponding ones for the second-price auction established by Said(2011). This implies that the well-known "revenue equivalence theorem"holds true for Said’s(2011) dynamic model setting.
