Wednesday, March 3, 2010

HW 7 is out

The last HW is now available on the web page...

Be sure to start the "rankmaniac revisited" problem TODAY! Otherwise you're missing a whole $1 of your budget...

5 comments:

  1. As some of you realized, your campaign in adwords may stop/reduce gaining clicks after some time. Remember that the difference of the bidding algorithms between google and yahoo. google uses your bid submitted times the clickthrough rate (CRT) to bid the ad slots. CRT is initialized some value and then measured during your campaign. If the CRT of some keywords in your campaign become very low, you may try some new keywords to increase your clicks.

    ReplyDelete
  2. For problem 3:

    What happens if two players bid the same value? How much do they pay and what do they get?

    ReplyDelete
  3. To Michelle: The second-price auction model in the homework is exactly the same as the one presented in our class. It doesn't matter if they bid the same value. Or you can assume they bid different values if you have difficulty to deal with it. The highest bidder wins the item and pays the second highest bid. His profit is his value minus what he pay. The bidder who loses the auction gets 0.

    ReplyDelete
  4. A second question about problem 3. In the problem specification it states that the buyers know the seller bids his own value s, but the question asks if if is a dominant strategy for the seller to bid truthfully. Are the buyers operating under some possibly false belief?

    ReplyDelete
  5. To Michelle: Actually they are two different questions. The first question is that, in the auction, the seller will always bid his true value s, and the two bidders know that the seller will bid his true value. How should they bid? The second question is that, can the seller bid other value to gain more profit than bidding s?

    ReplyDelete