Abstract
To realize the specific results in the sponsored search auctions, most advertisers submit particular bid prices. The bidding behaviors with specific purposes are called as the strategic bidding. However, some strategic bidding behaviors will result in negative effects, such as the elimination of the equilibrium and the payment increase for some advertisers. The bidding behaviors with negative results are termed as the vindictive bidding. We survey four strategic bidding behaviors which include a rational bidding and three vindictive bidding strategies. In this paper, we study the relationship between the effects resulted by the vindictive bidding and the valuations of the vindictive advertisers. In our experiments, the search engine provider (SEP) is benefited by all vindictive bidding behaviors, and the increment of the SEP's revenue is proportional to the degree of the vindictiveness. Bidding vindictively without sacrificing the own utility improves the advertiser's utility with high probability. Moreover, we observe that the SEP's revenue is improved by the following situations. First, the vindictive advertiser with low valuation in the keywords with high market value results in more SEP's revenue than that in the keywords with low market value. The second case is to raise the bidding competition between advertisers.
Highlights
When an Internet user submits a keyword query to the search engine provider (SEP), such as Google or Yahoo, the user will receive a web page including the search results and some advertisements
The advertising area includes some slots, and each slot displays some information of an advertisement including a title, a hyperlink connected to the source web page, and a brief description
We study the effects of the vindictive bidding in an English auction-based SSA: the nondecreasing sponsored search auction (NDSSA) [1]
Summary
When an Internet user submits a keyword query to the SEP, such as Google or Yahoo, the user will receive a web page including the search results and some advertisements. Some advertisers apply the flaw of the GSP to manipulate the payments of other advertisers rather than to maximize their own utility. This kind of bidding strategies is called the vindictive bidding [2]. The major objective of the vindictive bidding is to maximize the payment of the target advertiser. The utilities are decreased because the payments are raised by the vindictive bidding. The vindictive bidding increases SEP’s revenue and decreases the utilities of the target advertisers. To focus on the negative effects resulted from the vindictive bidding, we consider only one vindictive advertiser in each simulation instance. Even if bidding vindictively increases competitors’ payments, vindictive advertisers may lose a part of the utility in most instances
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