This paper analyzes mechanisms for selling advertising opportunities for several different positions on a page that would enable some advertisers to bid using Vickrey–Clarke–Groves (VCG) pricing while other advertisers bid using generalized second-price (GSP) pricing. I focus on a setting in which the number of ads displayed may vary with the advertisers’ bids and showing fewer ads enables the remaining ads to obtain more clicks. I illustrate the types of mechanisms one can construct that would ensure that VCG bidders have an incentive to bid truthfully, GSP bidders cannot obtain the same number of clicks at a lower price by varying their bid, and if all bidders bid using VCG (GSP) pricing, then the outcome is the same as it would be under the VCG (GSP) mechanism.
International Journal of Game Theory – Springer Journals
Published: Sep 12, 2017
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