Equilibrium Bidding Strategy for GSP Keyword Auctions

2009 ◽  
Author(s):  
Linjing Li ◽  
Daniel Dajun Zeng ◽  
Feiyue Wang
Keyword(s):  
Bidding Strategy ◽  
Keyword Auctions ◽  
Equilibrium Bidding

scholarly journals Reserve price of risk-averse search engine in keyword auctions with advertisers’endogenous investment

2019 ◽  
Author(s):  
Qin Yang ◽  
Xianpei Hong ◽  
Zongjun Wang ◽  
Huaige Zhang
Keyword(s):  
Risk Aversion ◽  
Social Welfare ◽  
Search Engine ◽  
Optimal Investment ◽  
Total Efficiency ◽  
Risk Averse ◽  
Reserve Price ◽  
Bidding Strategies ◽  
Keyword Auctions ◽  
Equilibrium Bidding

Motivated by vigorous development of keyword auctions, this paper analyzes the reserve price policies in keyword auction with advertisers’ endogenous investment and risk-averse search engine. We explore advertisers’ optimal investment and equilibrium bidding strategies , and derive the determination functions where utility-maximizing reserve price and efficient reserve price which maximizes the social welfare satisfy respectively. The results show that advertisers’ equilibrium bidding is monotonously increasing in bidders’ valuations, the number of advertisers, as well as the reserve price. Meanwhile, advertisers’ optimal investment is negatively correlated with reserve price and the number of advertisers. By numerical examples, the utility-maximizing reserve price decreases with the risk aversion parameter and the number of advertisers. Search engine’s expected utility increases with risk aversion parameter and decreases with the number of advertisers. Moreover, we declare that search engine can use reserve price as a regulatory tool to increase the utility. But there is an upper bound on search engine’s utility. It is interesting to find the efficient reserve price equals to zero. Hence there is a trade-off between total efficiency and search engine’s utility by search engine that has incentive to withhold reserve price that would benefit social welfare.

scholarly journals Strategies for Making Best Offers on eBay

2017 ◽  
Vol 14 (3) ◽  
Author(s):  
William Britt ◽  
William Gryc ◽  
Jamie Oliva ◽  
Brittney Tuff ◽  
Charli White
Keyword(s):  
Optimal Strategies ◽  
Bidding Strategy ◽  
Model Risk ◽  
Know How ◽  
Bayesian Nash Equilibrium ◽  
Sealed Bid ◽  
Risk Neutral ◽  
Price Auction ◽  
Equilibrium Bidding ◽  
Best Offer

We model for “Buy-It-Now or Best Offer” auctions on eBay using two different models. In the first model, risk-neutral bidders submit bids in serial and try to surpass a stochastic seller threshold while taking into account how many previous failed bids were made by other bidders. We compute optimal strategies for this model and show that bidder expected surplus decreases in the number of previous failed bids. In the second model we assume bidders do not know how many previous failed bids have been made, and instead use a first-price sealed-bid mechanism with a buy-out price where bidders serially submit bids with the knowledge that no previous bidders have used the buy-out price. We derive a unique equilibrium bidding strategy for risk-neutral bidders in this serial model, show that any equilibrium in a similar parallel bidding model is the same as the equilibrium in the serial model, and compute seller revenue. In particular, under certain circumstances, bidders will bid more in this format than they would in a standard first-price sealed-bid auction, but that a seller maximizes expected revenue by setting a buy-out price higher than any bidder is willing to pay thereby making the auction essentially a first-price auction. KEYWORDS: Auction Theory; eBay; Buy-It-Now or Best Offer; Symmetric Bayesian Nash Equilibrium; Buy-Out Price; First-Price Sealed-Bid

Sequential First-Price Auction with Randomly Arriving Buyers

2018 ◽  
Vol 6 (1) ◽  
pp. 29-34
Author(s):  
Shulin Liu ◽  
Xiaohu Han
Keyword(s):  
Dynamic Model ◽  
Equivalence Theorem ◽  
Bidding Strategy ◽  
Revenue Equivalence ◽  
Dynamic Markets ◽  
Differentiated Goods ◽  
Price Auction ◽  
Second Price Auction ◽  
Equilibrium Bidding ◽  
Model Setting

AbstractIn 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.

Optimal Bidding Decision of Bidders in Homogeneous Goods Procurement

2013 ◽  
Vol 415 ◽  
pp. 726-729
Author(s):  
Zhong Wen Chen
Keyword(s):  
Optimal Decision ◽  
Bidding Strategy ◽  
Uniform Price Auction ◽  
Uniform Price ◽  
Nonlinear Equilibrium ◽  
Price Auction ◽  
Optimal Bidding ◽  
Equilibrium Bidding ◽  
Divisible Goods ◽  
Optimal Decision Making

In this paper, a uniform price auction mechanism for procuring homogeneous divisible goods is studied, and both nonlinear bidding strategy and linear bidding strategy of symmetric bidders are analyzed. And then the dominant relationship is discussed deeply between the two kinds of equilibrium bids. The results show that the nonlinear equilibrium bidding strategy dominates linear ones. Based on this analysis, several suggestions are given on how to make optimal decision making on bidding strategy choice for bidders.

scholarly journals COUNTERACTING SHILL BIDDING IN ONLINE ENGLISH AUCTION

2005 ◽  
Vol 14 (02n03) ◽  
pp. 245-263 ◽  
Author(s):  
BHARAT BHARGAVA ◽  
MAMATA JENAMANI ◽  
YUHUI ZHONG
Keyword(s):  
Uniform Distribution ◽  
Expected Utility ◽  
Online Auctions ◽  
Bidding Strategy ◽  
The Internet ◽  
English Auction ◽  
Bidding Strategies ◽  
Shill Bidding ◽  
Auction Mechanisms ◽  
Equilibrium Bidding

The popularity of online auctions and the associated frauds have led to many auction sites preferring English auction over other auction mechanisms. The ease of adopting multiple fake identities over the Internet nourishes shill bidding by fraudulent sellers in English auction. In this paper, we derive an equilibrium bidding strategy to counteract shill bidding in an online English auction. An algorithm based on this strategy is developed. We conduct experiments to evaluate the strategy in a simulated eBay like auction environment. Five popular bidding strategies are compared with the proposed one. In the simulation, bidders compete to buy a product in the presence of a shill. Each bidder is randomly assigned a bidding strategy. She draws her valuation from a uniform distribution. The experiments show hat the average expected utility of agents with proposed strategy is the highest when the auction continues for a longer duration.

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