TY - JOUR
T1 - Bidding behaviors for a keyword auction in a sealed-bid environment
AU - Kamijo, Y.
N1 - Funding Information:
I thank Makoto Yokoo, Yukihiko Funaki, and the participants at the 2010 Japanese Economic Association Autumn Meeting and the 2011 Autumn Meeting of the Operations Research Society of Japan for their helpful comments. I am also grateful for the associate editor and two anonymous referees for their useful comments and suggestions. This work has been financially supported by the JSPS Grant-in-Aid for Young Scientists (B) 21730162 and 23730194 , and by the Seimeikai foundation .
PY - 2013/12
Y1 - 2013/12
N2 - A keyword auction is conducted by Internet search engines to sell advertising slots listed on the search results page. Although much of the literature assumes the dynamic bidding strategy that utilizes the current bids of other advertisers, such information is, in practice, not available for participants in the auction. This paper explores the bidding behavior of advertisers in a sealed-bid environment, where each bidder does not know the current bids of others. This study considers secure bidding with a trial bid (SBT) as the bid adjustment process used by the advertisers, which is functional in a sealed-bid environment. It is shown that the SBT bid adjustment process converges to some equilibrium point in a one-shot game irrespective of the initial bid profile. Simulation results verify that a sealed-bid environment would be beneficial to search engines.
AB - A keyword auction is conducted by Internet search engines to sell advertising slots listed on the search results page. Although much of the literature assumes the dynamic bidding strategy that utilizes the current bids of other advertisers, such information is, in practice, not available for participants in the auction. This paper explores the bidding behavior of advertisers in a sealed-bid environment, where each bidder does not know the current bids of others. This study considers secure bidding with a trial bid (SBT) as the bid adjustment process used by the advertisers, which is functional in a sealed-bid environment. It is shown that the SBT bid adjustment process converges to some equilibrium point in a one-shot game irrespective of the initial bid profile. Simulation results verify that a sealed-bid environment would be beneficial to search engines.
KW - Dynamic game of incomplete information
KW - Internet advertisements
KW - Keyword auction
KW - Sealed-bid environment
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U2 - 10.1016/j.dss.2013.07.003
DO - 10.1016/j.dss.2013.07.003
M3 - Article
AN - SCOPUS:84889085399
VL - 56
SP - 371
EP - 378
JO - Decision Support Systems
JF - Decision Support Systems
SN - 0167-9236
IS - 1
ER -