Abstract: The Generalized Second Price Auction has been the main mechanism used by search companies to auction positions for advertisements on search pages. In this paper we study the social welfare of the Nash equilibria of this game in various models. In the full information setting, socially optimal Nash equilibria are known to exist (i.e., the Price of Stability is 1). This paper is the first to prove bounds on the price of anarchy, and to give any bounds in the Bayesian setting. Our main result is to show that the price of anarchy is small assuming ...
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Topics: 
Mathematical economics