Nontruthful Position Auctions Are More Robust to Misspecification
Paul Dütting, Felix Fischer, David C. Parkes
Source record
Source: Crossref
Published: May 1, 2024
DOI: 10.1287/moor.2023.1380
Open original source ↗Source abstract
We consider the classical model of sponsored search due to Edelman et al. and Varian and examine how robust standard position auctions are to a misspecification of the position-dependent quality factors used by this model. We show that under both complete and incomplete information a nontruthful position auction admits an efficient equilibrium for a strictly broader range of parameter values than the Vickrey-Clarke-Groves (VCG) mechanism, which would be truthful if the parameters were specified correctly. Our result for complete information concerns the generalized second-price (GSP) mechanism and is driven by a detailed understanding of the Nash equilibrium polytopes of the VCG mechanism and the GSP mechanism. Our result for incomplete information concerns the generalized first-price (GFP) mechanism and uses a surprising connection between the unique candidate equilibrium bidding functions of the VCG mechanism and the GFP mechanism. Funding: F. Fischer was supported by the Engineering and Physical Sciences Research Council [Grant EP/T015187/1] and Einstein Stiftung Berlin.
Evidence graph
No public relationships recorded yet.
Integrity note: This page is a factual metadata record created by deterministic ingestion. It is not a claim that the work moves a mathematical frontier or has been independently verified.