Sponsored Search: The Generalized Second Prize Auction

Maastricht University
School of Business & Economics
Place & date:
Maastricht, 08-06-2015
Name, initials:
Derek van den Elsen, DJA
ID number:
I6052872
Study:
Econometrics & Operations Research
Course code:
2014-500-EBC2091
Group number:
X
Tutor name:
Dries Vermeulen
Writing
Auctions Research Paper
assignment:
Your UM email address: d.vandenelsen@student.maastrichtuniversity.nl

1.

Introduction

Web search engines act as an information gateway and are an essential tool to browse the web
efficiently. 98.8% of Internet users utilize search, industry surveys report that more than 50%
of Web users visit a search engine every day, and Americans conduct roughly 6 billion Web
searches per month. All this involves a construction that goes through billions of webpages,

indexes several billion of documents (e.g. videos, texts, images, newspapers, blogs and
audio), accepts thousands of web queries a second (http://www.internetlivestats.com/onesecond/#google-band) and presents billions of links. It also offers some miscellaneous
services like spell checking, definitions, currency conversion, time zones, flight schedules etc.
There is even an industry dedicated to providing the service of having your website appear
more on popular search engines, partly by reverse engineering the ranking algorithms that are
used. (Fain & Pederson, 2006)
Sponsored search is the reason this can all be offered for free. Companies can pay a certain
amount to the search engine for an advertisement to appear when a query is made for a certain
keyword. Searchers essentially pay by giving some attention to these messages. The image on
the following page shows sponsored search in action, where red wigs is queried and
advertisements show up. Sponsored Search is one of the fastest growing, most effective, and
most profitable form of advertising, generating roughly $7 billion in revenue in 2005 after
nearly doubling every year for the previous 5 years. Majestic Research reports that as many as
17% of Google searches result in a paid click, and that Google earns roughly nine cents on
average for every search query they process. Today, Internet giants Google and Yahoo boast a
combined market capitalization of over $150 billion, largely on the strength of sponsored
search. Roughly 85% of Googles $4.1 billion in 2005 revenue and roughly 45% of Yahoo!s
$3.7 billion in 2005 revenue is likely attributable to sponsored search. A number of other
companies including eBay (Shopping.com), FindWhat, InterActiveCorp (Ask.com),
LookSmart, and Microsoft (MSN.com) earn hundreds of millions of dollars in sponsored
search revenue annually. (Nisan et al., 2007)

http://www.searchenginepeople.com/wp-content/uploads/2009/06/ppc-search-example.jpg
1

Firstly, this paper will define what exactly sponsored search is with a few key concepts in the
process. It will also touch upon some of the unique characteristics in this particular market.
Secondly, it will go through the history of the sponsored search market and more specifically
which auctions were mainly used. Thirdly, it will discuss these mechanisms more in depth by
use of illustrative examples that showcase some properties. Fourthly, it will pit the currently
used generalized second price auction (GSP) against the Vickrey-Clarke-Groves (VCG)
mechanism popular in the literature. Fifthly, it will introduce the Fair and Efficient
Distribution of Resources mechanism (FEDoR) as an alternative to the GSP. Finally it will
end with a short conclusion again summarizing what has been discussed and proposing that
since GSP has some desirable properties, future research should be aimed at expanding the
specific terms within that auction and also remain open for new mechanisms like FEDoR.
2. What is Sponsored Search
The main conceptual elements of the sponsored search process and parties involved are
(Jansen &Mullen 2008):

Provider: A person or organization that wants to direct searchers that query a specific
keyword to a particular website for some specific purpose. Usually this is an
advertisement although it is not necessary that this is merely for commercial reasons,
but possibly a genuine effort to provide relevant content. Throughout the paper both

advertiser and provider will be used interchangeably

Provider content: A uniform resource locator (URL) to a website, alongside a
description of what that website has to offer, usually intended to entice the searcher to

click on the link.

Provider bids: Bids for specified keywords that indicate in terms of money how much

the added traffic to a particular website is worth to the provider

Search engine: A search engine that displays the provider content according to

prespecified terms
Search engine review process: A method utilized by the search engine to check that the

providers content has some relevance to the keyword queried by the searcher.
Search engine keyword and content index: A mechanism that matches the queries with
URLs in their database and sponsored links in a certain way.

Search engine user interface: An application that displays the organic search results
together with the sponsored search results in a certain way that respects the ranks

dictated by the auction.

Search engine tracking: An application that keeps track of a large number of statistics.
The number of queries and their associated content, the number of times providers
content is displayed, the number of times it is clicked. It will charge the provider based

on these statistics and the aforementioned agreements and bids.

Searcher: A person that will input a keyword in search of something and that in
particular will click on sponsored links that are deemed relevant.

It is quite unique from an auction perspective that there are not just buyers and sellers in the
sponsored search niche. There is a provider, search engine and searcher in this case. The
contracts are typically only between provider and search engine, yet the amount of searchers
is very important for the implications and magnitude of this contract. The major players are
Google, Yahoo, Bing and Baidu and all of them make use of sponsored search. The
smartphone search market becomes increasingly more important and certain countries show a
strong popularity for other search engines than Google. Baidu is for example the most popular
search engine in China. It is important to note that sponsored search results not only compete
with other sponsored search results but also with organic search results. Another important
property to note is that that if an advertisement slot is not used, its associated revenue is
wasted in some sense, since the costs of the search engine for putting the advertisement there
are negligible.
Desktop Search Engine Market Share
May, 2015

https://www.netmarketshare.com/search-engine-market-share.aspx?qprid=4&qpcustom=1

3.

History of Sponsored Search

Sponsored Search has undergone 3 major stages thus far. Beginning in 1994, internet
advertisements were mostly sold on a per-impression basis. There were not a lot of
participants, contracts were discussed case-by-case and were typically large. Flat fees were
paid for a flat number of showings. Or flat fees were paid to stay on for a fixed amount of
time. (Fain & Pederson, 2006)
In 1997, GoTo.com (renamed Overture in 2001) (acquired by Yahoo! in 2003 for $1.63
billion) revolutionized the Sponsored Search market by introducing auctions in the mix. In the
original design each participant reported their willingness to pay on a per-click-basis for a
particular keyword. Every time a searcher clicks on a sponsored link, the participant is billed
its most recent bid. This is unfortunately vulnerable to click fraud where an automated
program clicks the search link multiple times. This can be done against competitors in order
to

deplete

their

budgets

for example.

For a

discussion

on

click

fraud

see

https://www.asis.org/Bulletin/Dec-05/clickfraud.html (Kitts et al., 2005)

However this pay-per-click payment scheme makes sense because it is a middle ground
between the following two conflicting perspectives: The search engine would want to be paid
each time a query shows a sponsored link, making it bear no risk and get appropriately
compensated for providing its service. The advertiser however would only want to pay when
the transferred searcher actually purchases whatever is advertised so it would bear no risk.
Pay whenever a searcher is transferred by clicking on the sponsored link is a middle ground
that this particular industry has seemed to have settled on. Note that this is more of a
spectrum as there could for example also be a payment scheme where the advertiser pays if
the transferred searcher makes an account on its website (but does not necessarily purchase
anything)
This auction format is known as the generalized first price auction (GFP). This unfortunately
proved to be highly unstable and was innovated to the generalized second price auction by
Google in 2002. Google also took the quality of the advertisement in account, instead of just
the ranking of final bids, in determining how they would allocate their slots. They based it
mainly on the click-through rate, the probability that the advertisement would be clicked
when the advertisement appears, and some other factors. This is still a relatively black-box
4

process, but Google has made efforts to increase transparency. Yahoo has followed suit in
2007 and also bases their allocation of slots on more than just the bids now. (Edelman et al.,
2007)
4. Auctions

In the GFP auction, advertisers place some bids. Based on these bids the slots are allocated,
the highest bid gets the most desirable slot, the second highest bid gets the second most
desirable slot and so forth. Typically being higher than other slots is what classifies as more
desirable, because these slots allegedly get more attention. Psychological research in this area
could be of interest. (E.g. http://en.wikipedia.org/wiki/Serial_position_effect) If an
advertisers link is clicked, it automatically pays whatever it bid to get that slot, hence first
price. An example:
Suppose there are two slots on a page and three advertisers, an ad in the first slot receives 400
clicks per hour and the second slot receives 200 clicks per hour. Advertisers 1,2 and 3 value a
click respectively $20, $8 and $4. Suppose advertiser 2 bids $4.01 to guarantee a slot as
advertiser 3 would never want to bid above his valuation as that would lead to a loss.
Advertiser 1 would want to pay exactly $4.02 as the extra clicks of slot 1 are worth it and he
has no incentive to bid higher as he already gets slot 1 like this. Advertiser 2 would respond to
this by bidding exactly $4.03 as he values a click higher and hed obtain slot 1 like this. This
bidding war would continue until advertiser 1 bids $8.01, as at this point advertiser 2 no
longer finds it worth it to overbid him as he only values a click $8.00.
Given that advertiser 1 will occupy slot 1, advertiser 2 can drop his bid to $4.01 again to pay
less per click, but still occupy slot 2 over advertiser 3. Advertiser 1 can now again bid $4.02
and the bid cycle continues. Revising your bid as fast as possible is a natural strategy leading
to a very turbulent unstable environment and an incentive for inefficient investments in
bidding robots and the like in even this very simplified example. Add in the amazing
complexity of the market plus the fact that valuations are not even so easily estimated and
improvements are needed.

(Jansen & Mullen, 2008)

The GSP auction addressed these volatility issues. In this format, advertisers place some bids
and the slots are allocated in the same manner as before. However now the advertiser
associated with the ith slot, pays whatever the advertiser associated with the i + 1th slot bid,
where slots are ranked from most desirable to least desirable. This looks very similar to the
VCG mechanism. Google actually explicitly named Vickrey and stated that Googles unique
auction model uses Nobel Prize-winning economic theory to eliminate that feeling that
youve paid too much. (Edelman et al., 2007) However this is not the VCG mechanism and
does not generally carry the quality that bidders have a dominant strategy equilibrium in truth
telling, like VCG has. However if we apply the GSPs rules to the previous examples settings
and assume that bidders bid their valuation (bid truthfully):
Bids are respectively $20, $8 and $4, advertiser 1 and 2 win in that order. Advertiser 1 obtains
slot 1 and has to pay $8 per click, advertiser 2 obtains slot 2 and has to pay $4 per click.
Advertiser 1 will pay in total $3200 and advertiser 2 will pay in total $800. Advertiser 1 can
only make a meaningful impact on what happens by changing his bid to below $8 as anything
above he would still win slot 1 and pay advertisers 2 bid. He has no incentive to do so as he
would either change to slot 2 and pay 4$, but get 100 clicks less, or get no slot at all and pay
nothing at all, but get 200 clicks less. Advertiser 2 has similar reasoning for not dropping
below 4$ as he would lose his slot. Increasing his bid to an amount lower than 20$ would not
impact him at all and going higher than 20$ would result in him getting the first slot at a
payment of 20$ per click, whereas he only values it 8$, so he would also not want to do this.
6

Advertiser 3 has similar reasons for not wanting to increase his bid and he has no reason to
lower his bid. Truth telling is an ex-post equilibrium in this particular example as none of the
advertisers can profitably deviate from telling the truth given that other advertisers bid
truthfully.
Applying the VCGs rules to this same example would lead to the following: its a dominant
strategy to bid your valuation so each advertiser will do exactly that. Bids are again $20, $8
and $4. Advertiser 1 wins slot 1 and Advertiser 2 wins slot 2. With VCG you have to pay the
negative externality you are imposing on the other advertisers, meaning that we can compute
payments for an advertiser if we act as if said advertiser is not there. If advertiser 1 was out of
this auction, advertiser 2 would win slot 1 and get 200 clicks more (400 200), which he
values at $8 per click meaning a total of $8 x 200 = $1600. Advertiser 3 would now win slot 2
and get 200 clicks more (200 0), which he values at $4 per click meaning a total of $4 x 200
= $800. Total payment for advertiser 1 would then be $1600 + $800 = $2400. If advertiser 2
was out of this auction, advertiser 1 would still win slot 1 so there are no changes there.
However advertiser 3 could now get slot 2 and get 200 clicks more (200 - 0), which he values
at $4 per click meaning a total of $4 x 200 = $800. Note that the combined payments under
GSP are $3200 + $800 = $4000, which is more than under VCG $2400 + $800 = $3200, given
that in both auctions bidders bid truthfully.
It is a general result that, given truthful bidding, the revenue of GSP is at least as high as that
of VCG. (Edelman et al., 2007) Since an auctioneers main goals are effiency and revenue
maximization, the latter quality seems to be satisfied more here by GSP. However GSP is not
as strategyproof as VCG is, illustrated by a slight alteration to our example. Let us now
assume that slot 2 offers 399 clicks per hour. From advertisers 1 perspective he would under
truthful bidding obtain slot 1 and its 400 clicks at a payment of $8 per click where he values
each click at $20, giving him a total of ($20 - $8) x 400 = 4800$. However, assuming that the
other advertisers still bid truthfully, he can profitably deviate by changing his bid to $5 per
click. Advertiser 2 will now get slot 1 and advertiser 1 is left with slot 2. Advertiser 1 gets 399
clicks per hour at a payment of $4 where he values each click $20, giving him a total of ($20
$5) x 399 = $5985 > $4800, which is substantially larger than what he would get under
bidding truthfully.
This large incentive to strategize brings considerable costs for each advertiser as they would
need to spend considerable resources to not only estimate their own valuation, but also
7

estimate other bidders valuation and the strategy they would use. Estimating its valuation can
be done by estimating several conditional probabilities: the probability that the advertisement
is clicked given that it appears in a certain slot and the probability that once on the site a
certain action is made along with its associated revenue. However this simple approach
would already ignore things like searchers would only click on advertiser 1s slot if advertiser
2s slot is in a less desirable spot, so advertiser would not only care about its own slot but also
how other competitive advertisers would be allocated. Add on the fact that Google for
example not only allocates based on bid ranking, but also an internal quality rating scheme
and it becomes incredibly complex to bid appropriately in GSP. That does not even include
the fact that this is more of a micro perspective and advertisers must determine how to spread
their budget across campaigns, across keywords in those campaigns and then their bidding
strategies for each individual auction for those keywords. This complexity is mitigated by the
fact that it is a dynamic game and bids can be changed at any point in time, giving bidders the
chance to improve through trial and error.
Nevertheless Google and Yahoo use GSP over VCG, where in VCG you would simply have to
bid your valuation. Edelman et al. hypothesize 3 reasons for this: VCG is a less simple design
and harder to explain to typical advertisers, switching the current mechanisms may bring
substantial transaction costs with it, for the same bids VCGs revenues are lower than GSPs
and bidders might adapt slowly and lastly theory does not always directly translate to practice,
there is some risk involved.
GSP also has some redeeming qualities. If bidders are conservative (i.e. bid not more than
their valuation) and play only pure strategies, the price of anarchy is 1.618. If bidders are
conservative and can play mixed strategies it is 4. If bidders are conservative, can play mixed
strategies and only the distributions of other bidders valuations are common knowledge, as
opposed to the actual valuations, it is 8. (Paes Leme & Tardos, 2010) The price of anarchy is
the ratio between the socially optimal outcome, as if a central planner had control, and the
worst Nash equilibrium where each bidder plays a best response. The price of stability, which
is a similar ratio but now the best Nash equilibrium is considered, is found to be 1. (Varian,
2006) Conservative bidders is a straightforward assumption as even in VCG dropping this can
lead to incredibly bad equilibria e.g. consider 2 bidders who value one slot respectively 0 and
1 and bid 1 and 0, where bidding is normalized to be within the 0 and 1 interval. It is an
equilibrium where the first bidder would obtain the slot at no payment but would not value it

at all either, whereas the second player would have valued it 1 if the strategies would be
reversed.
There are however also other contestants like the FEDoR mechanism proposed by
Christoforou et al.. (Christoforou et al., 2015) In this mechanism every advertiser pays a flat
fee to the search engine in order to participate in the auction where they get distributed a slot
in such a fashion that it is socially efficient, fair and incentivizes them to report their
valuations truthfully. Here every bid made by advertisers is assumed to be an independent
uniform random variable between 0 and 1. The set of n risk-neutral advertisers is N = {1, ,
n} going for k slots where 1 k

wj

n. The value of a slot j is given by its weight

slots are sorted in order of decreasing weight such that

w1

w2

The possible allocation set is given by D where an element d = (

d1

d 2 , , d k

di

is the ordered list of slots getting allocated to an advertiser such that

wk

and
.

is the advertiser

who gets slot i.

Now each advertiser i privately assigns some value to a certain keyword modeled by the
parameter

, also commonly referred to as its type. The vector

(1 , 2 , , n )

indicates each advertisers type and is the set of possibly type vectors. Advertisers

preferences over outcomes are represented by utility functions:

ui

(d,

R ,

where in this particular context

i

N ,

ui

D , where

is defined as
ab

ui

wj id
j=1

is the Kronecker delta. A strategy

is the conditional probability that advertiser i reports

decision function g(d|

(d,

when its true type is

( i i )

. The

) gives the probability that the mechanism selects allocation d

when types are reported.

A mechanism is fair if every advertiser i has the same probability of getting the j-th slot for
every j

d
g

d =

d D : d j =i '

i,i N,

j = 1, , k

d D :d j =i

A mechanism is truthful if each advertiser receives highest utility if he reports truthfully

E[

ui ( d , i) g ( d| i , i )
ui ( d , i ) g ( d| )

d D

i N

d D

A mechanism is socially efficient if given that all players are reporting truthfully, total utility
is maximized.

E[

ui ( d , i ) g ( d| )
ui ( d , i ) g ( d| )| 1 , 2 , , n ]

i N d D

for any i i N

i N d D

FEDoR works as follows for an advertiser i:

1) Observe type

i
2) Choose type i using strategy
( i i )

3) Bid this type and receive other players reported types

10

4) For all x

N, if

v x =x otherwise

vx

resembles an uniform random sample closely enough

is generated pseudorandomly uniformly from the other

reported types x
5) Take allocation d D

such that

gf ( d|v )=1 , which is unique

The theoretical expected utility of an honest advertiser i under this mechanism is given by:
k

x x i, iis honest
E[ U i |
=

w j (n j+1)
j=1

n (n+1)

And an advertiser i who does not report his true type can theoretically expect:

x xN
E[ U i |
=

1
w
2 n j =1 j

The paper also supported its theoretical findings with an experimental study comparing
FEDoRs results with VCG and GSP. They simulated 100 experiments of 10000 rounds each
with up to 9 advertisers with various bidding behaviours and up to 9 slots. They also applied a
x

practical measure for determining whether

resembles an uniform random sample

closely enough by use of the Kologorov-Smirnov test.

The images below plot the tradeoff between the average utility of the advertisers and the
average utility of the auctioneer over all rounds. Firstly in the left image the number of slots k
is varied from 1 to 8, where the largest line corresponds to k = 8. The weight

wj

for each

slot j decreases from k to 1 with increments of 1. The number of advertisers n is kept constant
at 9. In the right image the number of slots k is kept constant at 3 and the number of
advertisers varies from 4 to 9, where 9 corresponds to the line with the largest slope. It is
assumed that advertisers bid truthfully in all scenarios including the GSP auction and that in
11

the FEDoR mechanism the flat participation fee is equal for all participants. This equal fee
can vary however and explains why it is a line segment instead of single points and is one of
the strengths of the FEDoR auction as it can more freely maneuver the tradeoff. The
participation fee can also be chosen in such a way that the desired utilities under the GSP and
VCG are reached. As mentioned before, under truthful bidding, the GSP outdoes the VCG in
auctioneer revenue in every scenario. Note also that as the number of advertisers increases in
the right image the utility of the advertisers goes down whereas the utility of the auctioneer
goes up.

Now it is assumed there are some cheaters among the advertisers, so determining whether
x

resembles an uniform random sample closely enough comes into play. In the previous

scenario this was done by some perfect goodness of fit test, however now we will use a KStest with p-value < 0.1 and history length 1000 as the paper finds this results in a large
percentage of true positives and not too many false positives. History length indicates the
number of values the test keeps as reference to see if the next value is in line with an uniform
distribution. The images below show the utility of honest advertisers in comparison with
dishonest ones under different scenarios A to J and advertisers now pay no flat fee. The top
boxes indicate the distribution for honest advertisers and the bottom ones for dishonest
advertisers.

12

Under A all 9 advertisers are honestly following an uniform, so there is no bottom box. All
other scenarios, B: 8 honest advertisers and 1 dishonest advertiser with normal distribution (
= 0.5, = 0.15), C: 8 honest advertisers and 1 dishonest advertiser with beta distribution ( =
0.9), D: 8 honest advertisers and 1 dishonest advertiser with beta distribution ( = 0.7), E: 8
honest advertisers and 1 dishonest advertiser with a random uniform distribution (different
from its own actual distribution of values), F: 6 honest advertisers and 3 dishonest advertisers
with random uniform distributions, G: 6 honest advertisers and 3 dishonest advertisers with
beta distributions ( = 0.9), H: 6 honest advertisers and 3 dishonest advertisers with beta
distributions ( = 0.7), I: 6 honest advertisers and 3 dishonest advertisers with normal
distributions ( = 0.5, = 0.15) and J: 5 honest advertisers, 1 cheater with random uniform
distribution, 1 with beta distribution ( = 0.9), 1 with beta distribution ( = 0.7) and 1 with
normal distribution ( = 0.5, = 0.15).

FEDoR

13

VCG

GSP

The mean of 5400 under honesty at A grossly outperforms any cheating advertiser under
scenarios B to J reaffirming that FEDoR is truthful. The blue line represents where the mean
would lie under the perfect goodness of fit test and the results here are relatively close to it
indicating that the KS-test with p-value < 0.1 and history length 1000 works well. It is also
interesting to note that under A the mean lies higher than the mean of honest players under
any kind of cheating scenario in FEDoR whereas this is not the case in VCG or GSP. Lastly
the social utility depicted below shows that for FEDoR social utility is maximized under
scenario A where everyone acts truthfully, whereas this is not the case for VCG or GSP. The
numbers are distorted in the sense that we have assumed no flat fee so FEDoR does not
necessarily lead to the huge efficiency increase as the numbers might indicate here. An
apparent shortcoming of having all advertisers pay the same equal flat fee, disadvantaging
advertisers with a bigger budget, could be overcome by having those advertisers act as more
than one individual player.

FEDoR

VCG

14

GSP

5. Conclusion

This paper has introduced itself by giving some facts that show the importance and magnitude
of the sponsored search market and in turn the significance of the auctions, whose rules
dictate how this market runs. It briefly discussed how the auction design evolved over the
years. It went more in depth discussing examples of GFP, GSP and VCG naming specifically
some properties they possess, where GSP tends to bring along more revenue and VCG is more
strategyproof. The particularly large industry seems to have settled on GSP as the primary
mechanism of choice. Regardless this does not mean the exact specifics of this auction are not
worth investigating more or that it is irreplaceable. For example the bidding language this
paper has discussed is very one-dimensional in the sense that bidders can only bid one number
for a particular keyword. Perhaps certain keywords work in a complementary fashion, or are
more substitutable or the advertiser wants to reach a particular audience more by only having
its bid count at certain times of the day or only when the search engine is accessed from a
certain location (obtained through IP address tracking). Such conditions are already widely
spread throughout the market and more research can address how these different dimensions
affect the GSP. Alternatively there is the FEDoR mechanism that is socially efficient, fair,
truthful and arguably more transparent than VCG. It outperforms the GSP on some levels, but
could stay dormant for the same reasons VCG has not replaced GSP and the fact that it is
relatively new. Changing the current design will bring significant transition costs with it and
should be done with caution, but it could lead to a more suitable mechanism on the other
hand.

15

6. References
Christoforou E., Anta A.F. & Santos A. (2015) A mechanism for fair distribution of
resources with application to sponsored search. Retrieved from:
http://arxiv.org/pdf/1502.03337v1.pdf
Edelman B., Ostrovsky M. & Schwarz M. (2007), Internet advertising and the generalized
second-price auction: selling billions of dollars worth of keywords. American Economic
Review. Retrieved from: www.cs.caltech.edu/~adamw/courses/.../search2.pdf
Fain, D.C. & Pederson J.O. (2006), Sponsored search: a brief history. Bulletin of the
American Society for Information Science and Technology. Retrieved from:
http://x86.cs.duke.edu/courses/cps296.3/spring07/fain_pedersen.pdf
Jansen, B.J. & Mullen T. (2008), Sponsored search: an overview of the concept, history,
and technology. International Journal, Electronic Business, Volume 6, Number 2. Retrieved
from:
http://faculty.ist.psu.edu/jjansen/academic/pubs/jansen_overview_sponosored_search.pdf
Kitts B., Laxminarayan P., Leblanc B. & Ryan Meech (2005) A formal analysis of search
auctions including predictions on click fraud and bidding tactics. Paper presented at ACM
Conference on E-Commerce Workshop on Sponsored Search. Retrieved from:
http://www.appliedaisystems.com/papers/ECom_Paper17.pdf
Nisan N., Roughgarden T., Tardos E. & Vazirani V. V. (2007) Sponsored search auctions.
Algorithmic Game Theory. Retrieved from:
www.cambridge.org/journals/nisan/downloads/Nisan_Non-printable.pdf
Paes Leme R. & Tardos E. (2010), Pure and Bayes-Nash Price of Anarchy for Generalized
Second Price Auction. FOCS '10 Proceedings of the 2010 IEEE 51st Annual Symposium on
Foundations of Computer Science. Retrieved from:
http://www.cs.cornell.edu/~renatoppl/papers/paesleme_tardos_focs10_manuscript.pdf

16

Varian H. R. (2006), Position auctions. International Journal of Industrial Organisation.

Retrieved from: http://people.ischool.berkeley.edu/~hal/Papers/2006/position.pdf

17