Revenue enhancement in ad auctions

Michal Feldman*, Reshef Meir, Moshe Tennenholtz

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review


We consider the revenue of the Generalized Second Price (GSP) auction, which is one of the most widely used mechanisms for ad auctions. While the standard model of ad auctions implies that the revenue of GSP in equilibrium is at least as high as the revenue of VCG, the literature suggests that it is not strictly higher due to the selection of a natural equilibrium that coincides with the VCG outcome. We propose a randomized modification of the GSP mechanism, which eliminates the low-revenue equilibria of the GSP mechanism under some natural restrictions. The proposed mechanism leads to a higher revenue to the seller.

Original languageEnglish
Title of host publicationInternet and Network Economics - 7th International Workshop, WINE 2011, Proceedings
PublisherSpringer Verlag
Number of pages8
ISBN (Print)9783642255090
StatePublished - 2011
Externally publishedYes
Event7th International Workshop on Internet and Network Economics, WINE 2011 - Singapore, Singapore
Duration: 11 Dec 201114 Dec 2011

Publication series

NameLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume7090 LNCS
ISSN (Print)0302-9743
ISSN (Electronic)1611-3349


Conference7th International Workshop on Internet and Network Economics, WINE 2011


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