Abstract
In a keyword auction, advertisers submit their bids to search keywords and their ads are displayed according the result of the auction when people search the keyword on internet search engines. In existing keyword auctions, the number of slots is determined in advance and the obtained social surplus is not always maximized. Thus, we develop new keyword auction protocols in which the auctioneer can flexibly determine the optimal number of slots which maximizes social surplus. The first protocol is based on the Vickrey-Clarke-Groves (VCG) mechanism. Although this protocol has good theoretical characteristics such as strategy-proofness, determining the payment is quite complicated. The second protocol, which we call the GSP with Exculsive Right (GSP-ExR), eliminates these VCG drawbacks. If the value per click of the highest ranked bidder is large enough, then this bidder can exclusively display his advertisement by paying a premium.
