A Truthful Mechanism for Offline Ad Slot Scheduling

We consider the Offline Ad Slot Scheduling problem, where advertisers must be scheduled to sponsored search slots during a given period of time. Advertisers specify a budget constraint, as well as a maximum cost per click, and may not be assigned to more than one slot for a particular search. We give a truthful mechanism under the utility model where bidders try to maximize their clicks, subject to their personal constraints. In addition, we show that the revenue-maximizing mechanism is not truthful, but has a Nash equilibrium whose outcome is identical to our mechanism. As far as we can tell, this is the first treatment of sponsored search that directly incorporates both multiple slots and budget constraints into an analysis of incentives. Our mechanism employs a descending-price auction that maintains a solution to a certain machine scheduling problem whose job lengths depend on the price, and hence is variable over the auction. The price stops when the set of bidders that can afford...

• Type: Journal
• Year: 2008
• Where: CORR
• Authors: Jon Feldman, S. Muthukrishnan, Evdokia Nikolova, Martin Pal
• Keywords: Ad Slots, Budget Constraints, CORR 2008, Education, Sponsored Search