Bounding the inefficiency of outcomes in generalized second price auctions

Ioannis Caragiannis, Christos Kaklamanis, Panagiotis Kanellopoulos, Maria Kyropoulou, Brendan Lucier, Renato Paes Leme and Éva Tardos

Journal of Economic Theory, 2015, vol. 156, issue C, 343-388

Abstract: The Generalized Second Price (GSP) auction is the primary auction used for monetizing the use of the Internet. It is well-known that truthtelling is not a dominant strategy in this auction and that inefficient equilibria can arise. Edelman et al. (2007) [11] and Varian (2007) [36] show that an efficient equilibrium always exists in the full information setting. Their results, however, do not extend to the case with uncertainty, where efficient equilibria might not exist.

Keywords: Auction design; Equilibrium analysis; Price of anarchy; Bayesian games; Generalized second price auction; Keyword auctions (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:156:y:2015:i:c:p:343-388

DOI: 10.1016/j.jet.2014.04.010

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