# Mechanism Design for Ad Auctions with Display Prices

arXiv: https://arxiv.org/abs/2303.13192 · HTML: https://mlsanity.com/paper/2303.13192/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Builds on 7 of its 34 references that are in the map.
- First posted on arXiv 23 Mar 2023.

## Builds on (most cited first, 7 of 7)

- [Differentiable Economics for Randomized Affine Maximizer Auctions](https://mlsanity.com/paper/2202.02872/) (2022)
- [Reinforcement Mechanism Design, with Applications to Dynamic Pricing in Sponsored Search Auctions](https://mlsanity.com/paper/1711.10279/) (2017)
- [AiAds: Automated and Intelligent Advertising System for Sponsored Search](https://mlsanity.com/paper/1907.12118/) (2019)
- [GSP - The Cinderella of Mechanism Design](https://mlsanity.com/paper/1701.05946/) (2017)
- [Optimizing Affine Maximizer Auctions via Linear Programming: an Application to Revenue Maximizing Mechanism Design for Zero-Day Exploits Markets](https://mlsanity.com/paper/2006.14185/) (2020)
- [Latent Dirichlet Allocation for Internet Price War](https://mlsanity.com/paper/1808.07621/) (2018)
- [Efficiency of Ad Auctions with Price Displaying](https://mlsanity.com/paper/2201.12275/) (2022)

## Abstract (arXiv)

In many applications, ads are displayed together with the prices, so as to provide a direct comparison among similar products or services. The price-displaying feature not only influences the consumers' decisions, but also affects the advertisers' bidding behaviors. In this paper, we study ad auctions with display prices from the perspective of mechanism design, in which advertisers are asked to submit both the costs and prices of their products. We provide a characterization for all incentive compatible auctions with display prices, and use it to design auctions under two scenarios. In the former scenario, the display prices are assumed to be exogenously determined. For this setting, we derive the welfare-maximizing and revenue-maximizing auctions for any realization of the price profile. In the latter, advertisers are allowed to strategize display prices in their own interests. We investigate two families of allocation policies within the scenario and identify the equilibrium prices accordingly. Our results reveal that the display prices do affect the design of ad auctions and the platform can leverage such information to optimize the performance of ad delivery.