Position Auctions Research Articles

Sponsored-Link Auction and Market Segmentation in Two-Sided Markets

This paper investigates how the sponsored-link auction for multiple positions influence the market structure under a duopoly setting. We utilize a model of position auction with con-sumer search in a duopoly setting and derive the consumer distribution, advertiser bidding, and market equilibrium in this game. We discover that there exists a segmentation equilibri-um, in which a platform consists of high and low quality advertisers and consumers, while the other is composed of medium quality agents. The results regarding the agents' distribu-tion could bring valuable insights for regulatory policies about interactions and cooperation between large digital platforms.

LELANG JABATAN; INTEGRITAS ASN, KINERJA ASN, DAN FRAUD KEPALA DAERAH

The election of regional heads is carried out directly by the people and has an impact. The positive impact is that the community is directly involved in voting, while the negative impact is that the election costs are expensive for regional head candidates. Position auctions in several areas have changed meaning. This phenomenon used to carry out unloading and select Government Employees who are considered helpful and choose Government Employees who dare to register for positions with certain rates. This qualitative research uses the technical analysis of observation, and literature study with the method of triangulation of data sources as a test of data validity. The results found that the phenomenon of an auction of positions carried out unprofessionally became a transactional political tool for regional heads. The correlation of expensive political costs with low regional head integrity can trigger the occurrence of job auctions with tariffs. As a result, officials from the auction of positions will only serve their regional heads and think about their interests. This will affect regional transformation, bureaucratic reform, and less-than-optimal public services.

Nontruthful Position Auctions Are More Robust to Misspecification

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.

Adverse inclusion of asymmetric advertisers in position auctions

Product listing platforms commonly use generalized second-price auctions to select competing advertisers for limited ad positions. However, when advertisers are asymmetric, position auctions may confound the post-auction competition structure and thus endogenize the bidders’ values of the ad positions. We build an analytical model to examine the impact of position auctions on an asymmetric market structure, which consists of a mass marketer and two specialized advertisers of heterogeneous quality efficiencies. The advertisers bid for two ad slots and then compete for the market in price and quality. We find that the asymmetric market structure may increase the uncertainty of the auction outcomes, which then may induce the advertisers to underbid using a conservative strategy profile in the locally-envy free equilibrium. Consequently, the auction outcome may adversely include the less-efficient specialized advertiser. This result is stronger than the position paradox in the classic auction literature, as the advertiser with a competitive advantage may be driven out and obtain zero profit.

Competitive targeted online advertising

This paper examines how an online publisher utilizes its information about consumer preference to target advertising. In our model, two firms first bid for a prominent ad position in a publisher-organized position auction, and then compete on price in the subsequent product marketplace. We consider two dimensions of consumer heterogeneity. First, consumers are heterogeneous in product preference. Based on their tastes, some consumers prefer one product over the other, whereas other consumers may rank the products in an opposite order. Second, consumers differ in search preference, i.e., “nonshoppers” only consider the advertised product, while “shoppers” always search both firms’ products before buying. We show that targeted advertising based on product preference will mitigate price competition in product markets as well as competition in position auctions, the latter to the detriment of the publisher. In contrast, targeted advertising based on search preference always benefits the publisher, as the winning firm can charge monopoly prices to nonshoppers. We show that the publisher’s optimal choice is to utilize only the information about consumer search preference. We also explore the welfare implications of targeted advertising based on different types of consumer preference.

ELECTION OF REGIONAL HEAD BASED ON HIERARCHY: STRENGTHENING ARGUMENTATION OF THE DISCUSSION OF ABOLISHING DIRECT ELECTIONS IN INDONESIA AND PROPOSED MODELS

Since the direct election of regional heads (Pilkadasung) has resulted in six major problems. These six big problems gave birth to the discourse of eliminating the Pilkadasung in Indonesia, and replacing it with a new system that is still within the corridors of democracy. The formulation of the problem in this paper are: (1) what arguments can be given in order to strengthen the discourse on the abolition of the Pilkadasung?, and (2) the proposed model that can be given as a substitute for the abolition of the Pilkadasung?. This paper is a conceptual study. Based on state administration practices that occur in the Special Region of Yogyakarta, where the election of regional heads uses the determination method, where Sri Sultan Hamengkubuwono and Sri Paku Alam are appointed by the President as Governor and Deputy Governor (DIY). As well as. practice of state administration in the Special Capital Region of Jakarta, where the Mayor is appointed by the Governor. Then, based on the theory from Manor and Crook. Strengthening the argument that the Pilkadasung is not the only way that is the most democratic, so alternative models can be used with other systems. In an effort to eliminate the six major problems of the Pilkadasung, the proposed model proposed in this paper is a hierarchy-based regional head election. The Governor is appointed by the President, and the Mayor/Regent is appointed by the Governor. The appointment process uses the following mechanisms: (1) an open position auction, (2) a public hearing, and (3) a fit and proper test at the Provincial DPRD for the Governor and at the City/Regency DPRD for the Mayor and/Regent. This mechanism is implemented gradually and transparently.

Analysis of online position auctions for search engine marketing

Analysis of online position auctions for search engine marketing

Position Auctions with Multidimensional Types: Revenue Maximization and Efficiency

Position Auctions with Multidimensional Types: Revenue Maximization and Efficiency

Optimal Design of Revenue‐Maximizing Position Auctions with Consumer Search

We examine the impact of consumer search from the perspective of revenue‐maximizing optimal auction design. In this two‐sided market, advertisers are endowed with privately known qualities, and consumers incur heterogeneous search costs when clicking on advertisements displayed by the search engine. Our general approach eliminates ad hoc restrictions and therefore allows us to uncover the salient economic trade‐offs. We adopt the optimal mechanism design approach to examine this two‐sided private information problem. The optimal mechanism design approach gives rise to the truly revenue‐maximizing scheme, and yields managerial implications that are substantially different from the literature. We show that from the revenue maximization perspective, the search engine necessarily displays the advertisers in the descending order of their qualities. The search engine shall insert unnecessary hassles to induce the revenue‐maximizing search behaviors. Thus, each consumer stops searching pre‐maturely compared to the socially optimal search behavior. In addition, the search engine shall implement probabilistic forced termination upon consumers’ clicking on advertisements, and this probability is higher for advertisers with poorer qualities. When each advertiser has a two‐dimensional type on consumer learning and matching, even if consumers’ search costs become negligible, the allocative inefficiency does not vanish. Moreover, no strategic obfuscation is imposed. When allowing for non‐independent qualities, we show that product variety does not constitute a rationale for advertisers’ favoritism.

Implementation of Position Auction Promotion through the "Assessment Center" in Aceh Province

The promotion of the position auction through the "assessment center" is an effort to reform the bureaucracy by the Aceh provincial government. This is done as a response from the government to the image of services that were previously deemed not optimal and to improve the quality of effective and efficient public services. This study aims to determine the process of implementing a promotion auction for positions through an assessment center in Aceh Province. qualitative research methods. This study found that the Aceh provincial government had carried out a position auction promotion to fill the vacancy of structural positions held. This is done as a step in improving government performance to make it more optimal. The auction of this position carried out by the Aceh Provincial Government will be seen by involving the Aceh Civil Service Agency (BKA) against Law no. 5 of 2014 which regulates the state civil apparatus. It is hoped that the results of the promotion of the position auction will eventually be able to place relevant structural officials with better capabilities and performance.

Position auctions with multi-unit demands

This paper studies the design of position auctions when bidders have multi-unit demands for advertising positions. I propose an ascending clock auction with two stages: allocation stage and assignment stage. The allocation stage determines the quantity of positions assigned to each advertiser using a generalized version of the Ausubel (2004) auction under the context of differentiated items. The assignment stage determines the ranking of advertisements using a generalized version of the generalized English auction under the context of multi-unit demands. I show that this two-stage ascending clock auction dynamically implements the VCG outcome in an ex post perfect equilibrium under pure private values.

A Mechanism Design Perspective of Live-streaming Commerce: The Role of Information Provision

Live-streaming advertising in e-commerce is soaring. Both Amazon and Alibaba have employed this novel marketing model to engage consumers by sequentially exhibiting different products through live-streaming videos. In this paper we adopt a mechanism design framework to model live-streaming e-commerce as a position auction with endogenous provision of product information. We prove that finding the mechanism that simultaneously optimizes position allocation and information provision is NP-hard. Thus we develop several approximation algorithms. Our results show that heuristics that leverage product information provision alone achieve up to 66.9% of the optimal revenue in the worst case, whereas the heuristic that exploits position allocation only may lead to arbitrarily large revenue losses. We attribute the effectiveness of product information provision to its enhancement of the value of ad spots in position auctions. Our work suggests that advertising that focuses on providing differentiating product information—as in live-streaming e-commerce—is more profitable than conventional position-based sponsored search.

Optimal Design of Revenue-Maximizing Position Auctions With Consumer Search

We examine the impact of consumer search from the perspective of revenue-maximizing optimal auction design. In this two-sided market, advertisers are endowed with privately known qualities, and consumers incur heterogeneous search costs when clicking on advertisements displayed by the search engine. Our general approach eliminates ad hoc restrictions and therefore allows us to uncover the salient economic trade-offs. We adopt the optimal mechanism design approach to examine this two-sided private information problem. We show that from the revenue maximization perspective, the search engine necessarily displays the advertisers in the descending order of their qualities. The search engine shall insert unnecessary hassles to induce the revenue-maximizing search behaviors. Thus, each consumer stops searching pre-maturely compared to the socially optimal search behavior. Moreover, the obfuscation level is higher for consumers with higher search costs. In addition, the search engine shall implement probabilistic forced termination upon consumers' clicking on advertisements, and this probability is higher for advertisers with poorer qualities. When each advertiser has a two-dimensional type on consumer learning and matching, we show that even if consumers' search costs become negligible, the allocative inefficiency does not vanish. Moreover, no strategic obfuscation is imposed. When allowing for non-independent qualities, we show that product variety does not constitute a rationale for advertisers' favoritism.

Implementation of Decency Test and Strategic Position Feasibility in accordance with Law Number 5 of 2014 in Medan City Government, Deli Serdang Regency and Samosir Regency

This study seeks (1) to explore local government strategies in selecting personnel for strategic positions; (2) studying the role of the RPA (Regional Personnel Agency) in carrying out the Decency and Appropriateness Test of personnel applying for the "Position Auction"; (3) studying the role of the Sekwilda in conducting the fit and proper test; (4) searching for the fit and proper test models according to local characteristics. The agenda for improving Indonesia's public sector becomes a necessity if it is linked to developments and current demands, such as good governance, professionalism, transparency, accountability, ethical and moral enforcement in the delivery of public services (Milakovich and Gordon, 2007 in Nurprojo, 2014). The improvement of the Indonesian bureaucracy through the enactment of the State Civil Apparatus Law is expected to be able to realize a better Indonesian bureaucracy through the performance of professional civil servants based on competence and competition by establishing a merit system in State Civil Apparatus management. This study uses a qualitative paradigm by relying on researchers as data collectors through in-depth interviews and participatory observation. In-depth interviews were conducted with local elites (Head of the Regional Personnel Agency, Staff of the Regional Personnel Agency, Members of the Regional People's Representative Council, Members of the Selection Committee, Non-Governmental Organizations, the media and intellectuals) who were concerned with local governance. This is done to determine the implementation of the propriety test and due diligence in the context of filling strategic positions in the regions.

Improved Revenue Bounds for Posted-Price and Second-Price Mechanisms

We study revenue maximization through sequential posted-price (SPP) mechanisms in single-dimensional settings with n buyers and independent but not necessarily identical value distributions. We construct the SPP mechanisms by considering the best of two simple pricing rules: one that imitates the optimal/Myersonian mechanism via the taxation principle and the other that posts a uniform price. Our pricing rules are rather generalizable and yield the first improvement over long-established approximation factors in several settings. We design factor-revealing mathematical programs that crisply capture the approximation factor of our SPP mechanism. In the single-unit setting, our SPP mechanism yields a better approximation factor than the state of the art prior to our work (Azar et al. 2018). In the multi-unit setting, our SPP mechanism yields the first improved approximation factor over the state of the art after over nine years (Yan (2011) and Chakraborty et al. (2010)). Our results on SPP mechanisms immediately imply improved performance guarantees for the equivalent free-order prophet inequality problem. In the position auction setting, our SPP mechanism yields the first higher-than 1 − 1/e approximation factor. In eager second-price (ESP) auctions, our two simple pricing rules lead to the first improved approximation factor that is strictly greater than what is obtained by the SPP mechanism in the single-unit setting

A Position Auction Demonstration Project for Lowering Reference + Biosimilar Drug Prices in Medicare Part B

We outline below a proposal for a Center for Medicaid and Medicare Services (CMS) demonstration project involving a position auction overlay to the existing reimbursement system for Medicare Part B.

Expressiveness and Robustness of First-Price Position Auctions

Ideally, the properties of an economic mechanism should hold in a robust way across multiple equilibria and under varying assumptions regarding the information available to participants. Focusing o...

The impact of organic links in position auctions with popular versus niche keywords

AbstractWe analyze a game‐theoretic model to explore the impact of organic links (links generated by the search engine algorithm) and popular versus niche keywords on bidding strategies in sponsored link position auctions. In contrast to results in earlier literature, we find that with organic links the firm with the highest value per click does not necessarily win the first sponsored position; it may be optimal for a firm to bid an amount greater than the expected value from a click; and firms may choose not to bid even if they would incur no cost for clicks on the sponsored link.

Computational analysis of perfect-information position auctions

After experimentation with other designs, major search engines converged on weighted, generalized second-price auctions (wGSPs) for selling keyword advertisements. Theoretical analysis is still not able to settle the question of why they found this design preferable to other alternatives. We approach this question in a new way, adopting an analytical paradigm we dub “computational mechanism analysis.” Specifically, we sample position auction games from a given distribution, encode them in a computationally efficient representation language, compute their Nash equilibria, and calculate economic quantities of interest. We considered seven widely studied valuation models from the literature and three position auction variants. We found that wGSP consistently showed the best ads of any position auction, measured both by social welfare and expected number of clicks. In contrast, we found that revenue was extremely variable across auction mechanisms and was highly sensitive to equilibrium selection, the preference model, and the valuation distribution.

When Does Improved Targeting Increase Revenue?

In second-price auctions, we find that improved targeting via enhanced information disclosure decreases revenue when there are two bidders and increases revenue if there are at least four symmetric bidders with values drawn from a distribution with a monotone hazard rate. With asymmetries, improved targeting increases revenue if the most frequent winner wins less than 30.4% of the time under a model in which shares are well defined, but can decrease revenue otherwise. We derive analogous results for position auctions. Finally, we show that revenue can vary nonmonotonically with the number of bidders who are able to take advantage of improved targeting.