Economics and Computation Week #11: Auction: applications Pingzhong Tang kenshin@tsinghua.edu.cn http://iiis.tsinghua.edu.cn/~kenshin/ec/ 12/4/2018 Pingzhong Tang
Two applications of auctions eBay (Taobao, Amazon, JD) Google ads (Bing, Yahoo!, Facebook) 12/4/2018 Pingzhong Tang
eBay 12/4/2018 Pingzhong Tang
eBay 12/4/2018 Pingzhong Tang
Gross transaction volume comparison (year of 2015) Alibaba = Taobao+Tmall = 261+165=$426B Amazon = $ 88B eBay = $83B Walmart = $ 471B 2016: Alibaba surpasses Walmart 12/4/2018 Pingzhong Tang
Proxy bidding 12/4/2018 Pingzhong Tang
Rules and notations Taobao: Two bidders meet secret reserve! 12/4/2018 Pingzhong Tang
Example 12/4/2018 Pingzhong Tang
Recommendation by eBay 12/4/2018 Pingzhong Tang
A bidding war towards the end 12/4/2018 Pingzhong Tang
Potential downside of early bidding 12/4/2018 Pingzhong Tang
Searching for secret reserves 12/4/2018 Pingzhong Tang
eBay design choice 12/4/2018 Pingzhong Tang
Hard vs soft closing rules 12/4/2018 Pingzhong Tang
Taobao auction closing rules 1）司法拍卖出价延时的基本规则 在设置了出价延时的拍品竞拍结束的前2分钟（以系统接受竞价的时间显示为准），如果有竞买人出价竞拍，那么该次拍卖时间在此次出价的时间的基础上自动延时5分钟，循环往复直到没有竞买人出价竞拍时，拍卖结束。 2）司法拍卖出价延时举例说明 比如：假设某件拍品的拍卖结束时间是8月8日22点整，如果在8月8日21点58分15秒，有竞买人出价，那么系统将拍卖结束时间自动延长至8月8日22点03分15秒；如果在22点03分有竞买人出价，那么系统将自动延时到22点08分。 3）司法拍卖出价延时的效果 出价延时给拍卖用户带来的便利包括以下几点： 1.将给到竞买人更加充分的参与竞拍的机会。 2.避免因为网络或者电脑原因导致的延迟而错失出价机会。 12/4/2018 Pingzhong Tang
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Hard vs Soft closing rule Pros and Cons Soft closing=Early bidding: shared information promotes common value Hard closing=late bidding: allow seller to choose a closing time that attracts large demand (cf. 11.11) 12/4/2018 Pingzhong Tang
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Reputation system design Readings: Reputation and feedback systems in online platform markets. AER-2016. The limits of reputation in platform markets: an empirical analysis and field experiments. 12/4/2018 Pingzhong Tang
Google: sponsored search auctions 12/4/2018 Pingzhong Tang
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Statistics Google advertising revenue: 2011: $36,531M 2012: $43,686M 2013 first 3 quarters: $ 36,600 M Hal Varian: Google Chief Economist “What most people don’t realize is that all that money comes pennies at a time” References: Varian 2008: Position auctions Edelman et. al 2007: Internet advertising and generalized second price auctions 12/4/2018 Pingzhong Tang
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VCG for keywords auction Same allocation rule as GSP Everyone pays the damages he causes by his participation 12/4/2018 Pingzhong Tang
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Model K positions k= 1, …, K N bidders i=1,…, N Bidder i values position k at V= vixk vi is the value of a click to bidder i xk is the probability of a click at this slot Efficient allocation: v and x follow the same order 12/4/2018 Pingzhong Tang
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Observations of GSP Theorem. If bidders were to bid the same amount under VCG and GSP, then each bidder’s payment would be paygsp≥ payvcg Proof. Induction on positions. QED 12/4/2018 Pingzhong Tang
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Acknowledgement eBay Slides adapted from David Parkes@Harvard Google slides adapted from Jonathan Levin@Stanford 12/4/2018 Pingzhong Tang