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Prior-independent Dynamic Auctions for a Value-maximizing Buyer
Yuan Deng · Hanrui Zhang

Tue Dec 07 04:30 PM -- 06:00 PM (PST) @
We study prior-independent dynamic auction design with production costs for a value-maximizing buyer, a paradigm that is becoming prevalent recently following the development of automatic bidding algorithms in advertising platforms. In contrast to a utility-maximizing buyer, who maximizes the difference between her total value and total payment, a value-maximizing buyer aims to maximize her total value subject to a return on investment (ROI) constraint. Our main result is a dynamic mechanism with regret $\tilde{O}(T^{2/3})$, where $T$ is the time horizon, against the first-best benchmark, i.e., the maximum amount of revenue the seller can extract assuming all values of the buyer are publicly known.

Author Information

Yuan Deng (Google Research)
Hanrui Zhang (Duke University)

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