In a sponsored search auction the advertisement slots on a search result page are generally ordered by click-through rate. Bidders have a valuation, which is usually assumed to be linear in the click-through rate, a budget constraint, and receive at most one slot per search result page (round). We study multi-round sponsored search auctions, where the different rounds are linked through the bud...

Utilization of search engines services is embedded in many people's daily activities. However, consumers do not pay for these services, they are financed through sponsored search. The prevailing Generalized Second Price (GSP) auction mechanism, which is used by search engine service providers to allocate advertising slots to advertisers, who bid on keywords, only charges advertisers for clicks ...

The theory of sponsored search has been developing rapidly although with disagreement in scientific circles on answers to some basic questions about sponsored search. This study focuses on two of these questions, namely, if a search engine seeks to maximize profits, 1) what should its pricing policy be and 2) what should its ranking policy be. This paper uses experiments with economically motiv...

The dynamics of customer relationship are being reshaped by price-setting processes such as online auctions. This paper Ž . analyzes price setting process in business-to-consumer B2C online auctions. Typically, these auctions involve multiple identical units and utilize a variant of the traditional English-auction mechanism. We describe an online laboratory w experiment that compares the effici...

Herding behavior is widely observed in auctions. There are rational reasons for herding but herding can also be counterproductive. We found evidence of herding behavior and sub-optimal outcome in a multi-winner auction setting. This study adds to the knowledge of herding by looking at herding in an auction setting where there is extra incentive to herd (multi-winner auction). Our findings recon...

The success of sponsored search has radically affected how people interact with the information, websites, and services on the web. Sponsored search provides the necessary revenue streams to web search engines and is critical to the success of many online businesses. However, there has been limited academic examination of sponsored search, with the exception of online auctions. In this paper, w...

In this paper, we advance the state-of-the-art in designing ex-post truthful multi-armed bandit (MAB) mechanisms for multi-slot sponsored search auctions (SSA) through two different contributions. First, we prove two important impossibility results which rule out the possibility of an expost monotone MAB allocation rule having sublinear regret with time when the click through rates (CTR) of the...

The auction theory literature has so far focused mostly on the design of mechanisms that takes the revenue or the efficiency as a yardstick. However, scenarios where the capacity, which we define as “the number of bidders the auctioneer wants to have a positive probability of getting the item”, is a fundamental concern are ubiquitous in the information economy. For instance, in sponsored search...

We examine a formal model of sponsored search in which advertisers can bid not only on search terms, but on search terms under specific contexts. A context is any auxiliary information that might accompany a search, and might include information that is factual, estimated or inferred. Natural examples of contexts include the zip code, gender, or abstract “intentions” (such as researching a vaca...