Auction design with ex post ROI constraints
In this article, the authors address crucial gaps in online advertising by analyzing single-parameter auctions with strict, per-realization return on investment (ROI) targets. The study characterizes the necessary allocation and payment rules to achieve dominant-strategy incentive compatibility (DSIC) under these constraints. A key finding shows that DSIC pricing requires a standard Myerson payment combined with a tailored rebate to guarantee the ROI floor.\N\NFurthermore, the authors prove that optimal, revenue-maximizing, single-bidder scenarios necessitate a randomized allocation scheme with a first-price rule, marking a departure from traditional, deterministic Myerson auctions. Finally, the research investigates practical, deterministic auction structures for multi-participant environments, offering applicable insights for modern sponsored search platforms.
- Autobidding with constraints
- Maximal revenue with multiple goods: Nonmonotonicity and other observations
- Non-quasi-linear agents in quasi-linear mechanisms (extended abstract)
- Optimal Auction Design
- Optimal auction with financially constrained buyers
- Optimal auctions for asymmetrically budget constrained bidders
- Optimal mechanism for selling two goods
- Revenue maximization for buyers with costly participation
- Revenue maximization with an uncertainty-averse buyer
- Simple mechanisms for non-linear agents
- Simple, optimal and efficient auctions
- The optimal mechanism for selling to a budget-constrained buyer
- Truthfulness and approximation with value-maximizing bidders
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