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Social Surplus Maximization in Sponsored Search Auctions Requires Communication

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  • Suat Evren

Abstract

We show that computing the optimal social surplus requires $\Omega(mn)$ bits of communication between the website and the bidders in a sponsored search auction with $n$ slots on the website and with tick size of $2^{-m}$ in the discrete model, even when bidders are allowed to freely communicate with each other.

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  • Suat Evren, 2023. "Social Surplus Maximization in Sponsored Search Auctions Requires Communication," Papers 2305.07729, arXiv.org.
    • Handle: RePEc:arx:papers:2305.07729
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    1. Gonczarowski, Yannai A. & Nisan, Noam & Ostrovsky, Rafail & Rosenbaum, Will, 2019. "A stable marriage requires communication," Games and Economic Behavior, Elsevier, vol. 118(C), pages 626-647.
    2. Benjamin Edelman & Michael Ostrovsky & Michael Schwarz, 2007. "Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords," American Economic Review, American Economic Association, vol. 97(1), pages 242-259, March.
    3. Segal, Ilya, 2007. "The communication requirements of social choice rules and supporting budget sets," Journal of Economic Theory, Elsevier, vol. 136(1), pages 341-378, September.
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