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|Title: ||On the robustness of forward looking nash equilibrium in sponsored search auction|
|Other Titles: ||Guang gao pai mai ji zhi zhong qian zhan xing na shi jun heng de lu bang xing yan jiu|
|Authors: ||Liang, Li (梁櫟)|
|Department: ||Department of Computer Science|
|Degree: ||Master of Philosophy|
|Issue Date: ||2008|
|Publisher: ||City University of Hong Kong|
|Subjects: ||Internet auctions -- Mathematical models.|
Equilibrium (Economics) -- Mathematical models.
|Notes: ||CityU Call Number: HF5478 .L53 2008|
ix, 90 leaves 30 cm.
Thesis (M.Phil.)--City University of Hong Kong, 2008.
Includes bibliographical references (leaves 85-90)
|Abstract: ||Internet advertising has become one of the most popular advertising norm
for most big and small companies. Companies motivated by Search Engine
technologies such as Yahoo, Google, Baidu make billions of dollars in revenue
by selling advertisements with auction mechansim. The corresponding mechanism,
known as sponsored search auction, is best modelled as Generalized
Second Price (GSP) Auction and has been intensively studied.
Variants studied the protocol in terms of its equilibrium solutions with
focus on a subset - Symmetric Nash equilibrium while Edelman et al. investigated
a concept called Local Envy Free and the corresponding equilibrium
solution - Local Envy Free Equilibrium. According to their works, GSP was
not incentive compatible where no advertiser can maximize his by
telling his true value. On the other hand, their works also the usage
of GSP as the protocol to sell advertisements. They all derived equilibrium solutions whose revenues are at least as high as the VCG mechanism. Bu et
al. further studied bidding dynamics of protocol. They proposed a bidding
strategy motivated by an attribute of looking one step further called Forward
Looking strategy which resulted in a unique Nash equilibrium point same as
the one under VCG mechanism. In particular, Bu et al. substantiated the
convergence property of their strategy under randomized dynamics process.
Cary et al., meanwhile, studied the dynamics with the greedy rationality.
However, all their works rely on cooperation that all of the participants implements
the same strategy, where competitors' strategic behaviors might
not be the case in the real world.
In this thesis, I study the robustness of forward looking attribute against
other bidding rationalities. I focus on an aggressive strategic heuristic,
called vindictive bidding. I investigate three types of such bidding strategies.
I substantiate that forward looking strategy is robust against such vindictive
strategy that pure Nash equilibrium still exists under two of the strategies
even if there is arbitrary portion of vindictive bidders. To further justify
forward looking as a suitable bidding strategy, I study the bidder incentive
in the dynamic process. Empirical evidence is given to show that forward
looking is better against vindictive strategy in most cases. When a user migrates from forward looking strategy to any of the vindictive strategy. His
utility is most likely to decrease. With the growth of the number of vindictive
bidders, the auctioneer's revenue keeps increasing. Especially, when all the
bidders take the selective vindictive strategy, the auction reaches a Nash
equilibrium with the maximum revenue, which is worst to all the bidders.
Thus we conclude that bidders do not have much incentive to use any of the
|Online Catalog Link: ||http://lib.cityu.edu.hk/record=b2340770|
|Appears in Collections:||CS - Master of Philosophy |
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