Dynamic Cost-Per-Action Mechanisms and Applications to Online Advertising
We examine the problem of allocating a resource repeatedly over time amongst a set of agents. The utility that each agent derives from consumption of the item is private information to that agent and, prior to consumption may be unknown to that agent. The problem is motivated by keyword auctions, where the resource to be allocated is a slot on a search page. We describe a mechanism based on a sampling-based learning algorithm that under suitable assumptions is asymptotically individually rational, asymptotically Bayesian incentive compatible and asymptotically ex-ante efficient. The mechanism can be interpreted as a cost per action keyword auction.
|Date of creation:||Jul 2007|
|Contact details of provider:|| Postal: Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014|
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dirk Bergemann & Juuso Välimäki, 2006.
"Efficient Dynamic Auctions,"
321307000000000580, UCLA Department of Economics.
- Susan Athey & Ilya Segal, 2007.
"An Efficient Dynamic Mechanism,"
122247000000001134, UCLA Department of Economics.
- Milgrom,Paul, 2004.
"Putting Auction Theory to Work,"
Cambridge University Press, number 9780521536721, December.
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