Abstract
Motivated by the enormous growth of keyword advertising, this paper studies how to package certain resources into shares for auctioning to maximize the auctioneer's expected revenue. We study such a problem in a unit-price auction setting where each bidder has private valuation for the shares, and the allocation of shares is determined by the rank-order of bidders' willingness-to- pay for per-unit resources. We investigate two facets of the resource packaging problem. First, when resources are homogeneous, we consider how to choose the number and sizes of shares (i.e., the share structure) to maximize the auctioneer’s revenue. Second, when resources are heterogeneous, we analyze whether to offer them together (by blending the resources) or separately in different auctions.
Recommended Citation
Chen, Jianqing; Liu, De; and Whinston, Andrew, "Resource Packaging in Keyword Auctions" (2006). ICIS 2006 Proceedings. 119.
https://aisel.aisnet.org/icis2006/119