A Joint Auction Framework with Externalities and Adaptation

TL;DR

This paper introduces JEANet, a novel auction mechanism that incorporates externalities and adapts to multi-party bidding, improving revenue and efficiency in joint advertising slot allocation.

Contribution

It presents the first automated mechanism design method integrating global externalities into joint auctions, accommodating both joint and traditional advertising.

Findings

JEANet outperforms existing methods in multi-slot joint auctions.

The framework effectively handles externalities and bidding variability.

Experimental results show improved revenue and efficiency.

Abstract

Recently, joint advertising has gained significant attention as an effective approach to enhancing the efficiency and revenue of advertising slot allocation. Unlike traditional advertising, which allocates advertising slots exclusively to a single advertiser, joint advertising displays advertisements from brands and stores that have established a joint selling relationship within the same advertising slot. However, existing approaches often struggle to accommodate both joint and traditional advertising frameworks, thereby limiting the revenue potential and generalizability of joint advertising. Furthermore, these methods are constrained by two critical limitations: they generally neglect the influence of global externalities, and they fail to address the bidding variability stemming from multi-party advertiser participation. Collectively, these limitations present substantial challenges to the design of joint auction mechanisms. To address these challenges, we propose a Joint Auction Framework incorporating Externalities and Adaptation, and leverage the automated mechanism design (AMD) method through our proposed JEANet to compute joint auction mechanisms that satisfy the conditions of individual rationality (IR) and approximate dominant strategy incentive compatibility (DSIC). As the first AMD method to integrate global externalities into joint auctions, JEANet dynamically adapts to the bidding characteristics of multi-party advertiser and enables unified auctions that integrate both joint and traditional advertising. Extensive experimental results demonstrate that JEANet outperforms state-of-the-art baselines in multi-slot joint auctions.