A Game Theoretic Bidding Agent for the Ad Auction Game

TAC/AA (ad auction game) provides a forum for researchers into strategic bidding in keyword auctions to try out their ideas in an independently simulated setting. We describe an agent that successfully competed in the TAC/AA game, showing in the process how to operationalize game theoretic analysis to develop a very simple, yet highly competent agent. Specifically, we use simulation-based game theory to approximate equilibria in a restricted bidding strategy space, assess their robustness in a normative sense, and argue for relative plausibility of equilibria based on an analogy to a common agent design methodology. Finally, we offer some evidence for the efficacy of equilibrium predictions based on TAC/AA tournament data.