Competitive Analysis of Bidding Behavior on Sponsored Search Advertising Markets
Yong Yuan; Fei-Yue Wang; Daniel Zeng
Source PublicationCompetitive Analysis of Bidding Behavior on Sponsored Search Advertising Markets
2017
Volume4Issue:3Pages:179-190
Abstract.;
Online advertisers bidding in sponsored search
auctions through Web search engines are experiencing unprecedentedly
fierce competition in recent years, resulting in an
obvious upward trend in bids submitted by advertisers. This
bid inflation phenomenon poses significant threat to the overall
stability and the effectiveness of sponsored search markets.
Existing research efforts, however, do not yet provide directly
relevant theoretical or managerial insights to help understand
this kind of real-world competitive bidding behavior in sponsored
search. Our research is targeted at filling in this important
research gap. Based on a model of advertisers’ rational competitive
preference, we propose a novel equilibrium solution concept
called the upper bound Nash equilibrium (UBNE), which can be
viewed as the upper bound of the output-truthful subset in the
NE continuum of sponsored search auctions. We show that the
UBNE can better characterize advertisers’ competitive bidding
behavior than other solution concepts, offering a viable theorydriven
behavioral explanation for bid inflation.We also show that
the UBNE is a stable outcome of competitions among advertisers
in repeated game settings and yields the optimal outcome for
Web search engines.
KeywordBid Inflation Competitive Preference Sponsored Search Advertising (Ssa) Upper Bound Nash Equilibrium (Ubne).
Document Type期刊论文
Identifierhttp://ir.ia.ac.cn/handle/173211/15500
Collection复杂系统管理与控制国家重点实验室_先进控制与自动化
Recommended Citation
GB/T 7714
Yong Yuan,Fei-Yue Wang,Daniel Zeng. Competitive Analysis of Bidding Behavior on Sponsored Search Advertising Markets[J]. Competitive Analysis of Bidding Behavior on Sponsored Search Advertising Markets,2017,4(3):179-190.
APA Yong Yuan,Fei-Yue Wang,&Daniel Zeng.(2017).Competitive Analysis of Bidding Behavior on Sponsored Search Advertising Markets.Competitive Analysis of Bidding Behavior on Sponsored Search Advertising Markets,4(3),179-190.
MLA Yong Yuan,et al."Competitive Analysis of Bidding Behavior on Sponsored Search Advertising Markets".Competitive Analysis of Bidding Behavior on Sponsored Search Advertising Markets 4.3(2017):179-190.
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