A New Ranking Scheme of the GSP Mechanism with Markovian Users

Sponsored search auction is used by most search engines to select ads to display on the web page of a search result, according to advertisers’ bidding prices. The income of this targeted advertising business is a big part of the revenue of most search engines. The most widely used approach to choose ads is the Generalized Second Price (GSP) auction, choosing the i-th highest bidder to display at the i-th most favorable position and charging the (i + 1)-st highest bidding price. Most previous works about GSP auction are based on the separation assumption: the probability a user will click on an ad is composed of two independent parts: a quality factor of the ad itself and a position factor of the slot of the ad. The previous model does not include the externality an ad may bring to the other ads. We study a GSP auction in a Markovian user model where the externality is considered by modeling a user’s probability behavior when he reads ad list. In particular, we propose a new ranking...

• Type: Conference
• Year: 2009
• Where: WINE
• Authors: Xiaotie Deng, Jiajin Yu
• Keywords: Bidding Price, Economy, GSP Auction, Sponsored Search Auction, WINE 2009