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Chinese Journal of Management Science ›› 2014, Vol. 22 ›› Issue (10): 66-71.

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Decision Analysis of Bidding Prices base on Generalized First Price in Keyword Auction

YUAN Quan1, WANG Ding-wei2   

  1. 1. College of Mathematics and Information Science, Anshan Normal University, Liaoning 114005, China;
    2. College of Information Science and Engineering, State Key Laboratory of Synthetical Automation for Process Industries, Northeastern University, Shenyang 110819, China
  • Received:2012-03-21 Revised:2012-09-26 Online:2014-10-20 Published:2014-10-20

Abstract: Since advertisers cannot correctly evaluate the optimal bidding prices in keyword auction, the optimal bidding price decision has been a key problem waiting to be solved. Based on some assumptions equivalent to the assumption in Friedman's bidding model, the winning probabilities of keyword bidding are computed for all different advertising positions. According to the generalized first price auction mechanism, the decision model of optimal keyword bidding price is established. The model can support advertisers to select the optimal keyword bidding prices. Finally, the validity of the model is verified by simulations.

Key words: keyword auction, optimal bidding price, winning probability of bidding, generalized first price

CLC Number: