Pricing ad slots with consecutive multi-unit demand

Abstract We consider the optimal pricing problem for a model of the rich media advertisement market, that has other related applications. Our model differs from traditional position auctions in that we consider buyers whose demand might be multiple consecutive slots, which is motivated by modeling buyers who may require these to display a large size ad. We study three major pricing mechanisms, the Bayesian pricing model, the maximum revenue market equilibrium model and an envy-free solution model. Under the Bayesian model, we design a polynomial-time computable truthful mechanism that optimizes the revenue. For the market equilibrium paradigm, we find a polynomial-time algorithm to obtain the maximum revenue market equilibrium solution. In the envy-free setting, an optimal solution is presented for the case where the buyers have the same demand for the number of consecutive slots. We present results of a simulation that compares the revenues from the above schemes.

Authors

• Xiaotie Deng
• Paul Goldberg
• Jinshan Zhang

Keywords

• Mechanism design
• Revenue
• Advertisement auction