Towards Better Models of Externalities in Sponsored Search Auctions

Sponsored Search Auctions (SSAs) arguably represent the problem at the intersection of computer science and economics with the deepest applications in real life. Within the realm of SSAs, the study of the effects that showing one ad has on the other ads, a.k.a. externalities in economics, is of utmost importance and has so far attracted the attention of much research. However, even the basic question of modeling the problem has so far escaped a definitive answer. The popular cascade model is arguably too idealized to really describe the phenomenon yet it allows a good comprehension of the problem. Other models, instead, describe the setting more adequately but are too complex to permit a satisfactory theoretical analysis. In this work, we attempt to get the best of both approaches: firstly, we define a number of general mathematical formulations for the problem in the attempt to have a rich description of externalities in SSAs and, secondly, prove a host of results drawing a nearly complete picture about the computational complexity of the problem. We complement these approximability results with some considerations about mechanism design in our context.

[1]  Éva Tardos,et al.  Truthful mechanisms for one-parameter agents , 2001, Proceedings 2001 IEEE International Conference on Cluster Computing.

[2]  Mohammad Mahdian,et al.  A Cascade Model for Externalities in Sponsored Search , 2008, WINE.

[3]  Piotr Krysta,et al.  Externalities among Advertisers in Sponsored Search , 2011, SAGT.

[4]  I. Segal,et al.  What Makes Them Click: Empirical Analysis of Consumer Demand for Search Advertising , 2012 .

[5]  Nicola Gatti,et al.  Truthful learning mechanisms for multi-slot sponsored search auctions with externalities , 2012, Artif. Intell..

[6]  Nicola Gatti,et al.  Adopting the Cascade Model in Ad Auctions: Efficiency Bounds and Truthful Algorithmic Mechanisms , 2017, J. Artif. Intell. Res..

[7]  Marek Karpinski,et al.  New Inapproximability Bounds for TSP , 2013, ISAAC.

[8]  Sanjeev Khanna,et al.  Approximating Longest Directed Paths and Cycles , 2004, ICALP.

[9]  Noam Nisan,et al.  Computationally feasible VCG mechanisms , 2000, EC '00.

[10]  Piotr Berman,et al.  A d/2 Approximation for Maximum Weight Independent Set in d-Claw Free Graphs , 2000, Nord. J. Comput..

[11]  Fernando Diaz,et al.  Whole page optimization: how page elements interact with the position auction , 2014, EC.

[12]  Carmine Ventre,et al.  Towards Better Models of Externalities in Sponsored Search Auctions , 2016, ECAI.

[13]  Tim Roughgarden,et al.  Algorithmic Game Theory , 2007 .

[14]  Jon Feldman,et al.  Sponsored Search Auctions with Markovian Users , 2008, WINE.

[15]  Noga Alon,et al.  Color-coding , 1995, JACM.