Talk III: EC Workshop on Sponsored Search Auctions

Chicago and NY: for being twin great cities in each others' backyards, it is difficult to travel between them, or may be, it is just difficult to travel from or to Chicago. I enjoyed the workshop (before the EC08 conf) at Chicago. The website has links to pdfs of papers. Lot of top class researchers thinking through a focused set of problems, sometimes their footsteps landing on the same spot simultaneously. This was a workshop, there had already been talks on some nice technical results, so when I got to speak, I used it as an opportunity to ask: what is the "ultimate" auction we want to run for sponsored search? There is a lot of debate:

• GSP or VCG, bidder-position specific reserve prices
  
• charge per impression or click or sale or whatever,
  
• offline or online scheduling,
  
• allow expressive or use minimalist bidding language,
  
• allow targeting by location/time/positions or whatever, and
  
• the role of budgets.

I wanted a debate on if we had total control (we researchers do, in *our* world), what auction method should we use? Ignoring the budget issues and repeated auctions, I described a proposal to run a stable matching mechanism from my joint work with Gagan Aggarwal, David and Martin Pal. This is not a startling proposal because one is really standing on shoulders of giants who themselves are standing on shoulders of giants when one talks about matching markets in 2008. So, there was a danger that Economists and CStists better versed in Economics in the audience will be grated in some way, further that there is an ennui with stable matching results, and the sense that the giants have already trodded over the ground, is there anything new to do?

I argued that using such an assignment model, one can model the many variations of auctions in the list above that we seek, that the resulting mechanism can be efficiently implemented and most importantly, that proving the resulting mechanism to be simultaneously "truthful" for any combination of such variations (GSP bidder with per-impression cost as well as VCG bidder with per click cost and reserve prices in the same auction) is nontrivial. Several people asked me for a copy of the paper, so in the best case scenario, they needed more convincing by actually reading through the proofs! :) I think even asking for a mechanism that is simultaneously good for the different variations is already a progress, so I hope ultimate auctions emerge in the future.