This termpaper gives a critical synthesis of three scientific contributions dealing with optimal models of charging payments for Internet advertising, an important market of the new economy of the digital era. The theoretical context is game theory. The mentioned papers aim at finding the most efficient form of allocation, that is, a form of allocation which satisfies clients who invest in online advertising as well as search engine companies who offer advertising positions relating to keywords on websites visited by users: Every client should agree with the recent advertisement, and the search engine company should receive the best payment possible. This state of things is called an equilibrium in these papers.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Account one: Edelman et al. (2005): “Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords”
- Account two: Hal A. Varian (2007): “Position auctions”
- Account three: Fukuda et al. (2010): “Theoretical and experimental investigations of the performance of keyword auction mechanisms”
- Critical discussion
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This term paper aims to provide a critical synthesis of three scientific contributions that delve into optimal models for charging payments for online advertising, a crucial market in the digital era’s new economy. The theoretical framework employed is game theory. These papers seek to identify the most efficient form of allocation, one that satisfies both online advertising clients and search engine companies that offer advertising positions tied to keywords on websites visited by users. This state of equilibrium ensures that each client agrees with the recent advertising, while the search engine company receives the best possible payment.
- Optimal models for online advertising
- Efficiency and equilibrium in allocation
- Game theory and strategic bidding
- Generalized Second-Price (GSP) auction
- Comparison of GSP to other auction mechanisms
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter introduces the term paper's focus on analyzing optimal models for online advertising payment, emphasizing the importance of finding an efficient allocation that benefits both advertisers and search engine companies. The chapter highlights the use of game theory and the diverse approaches taken by the three papers under review.
- Account one: Edelman et al. (2005): This chapter examines the "Generalized Second-Price (GSP) auction," a model used by search engines to allocate advertising positions. The paper analyzes the GSP's similarities to the Vickrey-Clark-Groves (VCG) mechanism and the Generalized English auction, highlighting the GSP's advantages and disadvantages, including its lack of a truth-telling equilibrium. The chapter explores the concept of "locally envy-free equilibrium" as a possible outcome within the GSP model.
Schlüsselwörter (Keywords)
The main keywords and focus topics of this work revolve around online advertising, auction mechanisms, game theory, strategic bidding, and equilibrium. The research examines the Generalized Second-Price (GSP) auction and its relationship to other models, including the Vickrey-Clark-Groves (VCG) mechanism and the Generalized English auction. Key themes include efficiency of allocation, truth-telling, and the pursuit of equilibrium in online advertising markets.
- Quote paper
- Christian Summerer (Author), 2017, Auctioning online advertisement space, Munich, GRIN Verlag, https://www.grin.com/document/458853
