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arXiv · 1506.02013

VCG Payments for Portfolio Allocations in Online Advertising

James Li·Eric Bax·Nilanjan Roy·Andrea Leistra
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Abstract

Some online advertising offers pay only when an ad elicits a response. Randomness and uncertainty about response rates make showing those ads a risky investment for online publishers. Like financial investors, publishers can use portfolio allocation over multiple advertising offers to pursue revenue while controlling risk. Allocations over multiple offers do not have a distinct winner and runner-up, so the usual second-price mechanism does not apply. This paper develops a pricing mechanism for portfolio allocations. The mechanism is efficient, truthful, and rewards offers that reduce risk.

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BibTeXRIS

James Li, Eric Bax, Nilanjan Roy, Andrea Leistra. 2015-06-05. VCG Payments for Portfolio Allocations in Online Advertising. https://arxiv.org/abs/1506.02013

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