Throttling Equilibria in Auction Markets

Understand

Throttling is a popular method of budget management for online ad auctions in which the platform modulates the participation probability of an advertiser in order to smoothly spend her budget across many auctions.

• In this work, we investigate the setting in which all of the advertisers simultaneously employ throttling to manage their budgets, and we do so for both first-price and second-price auctions.
• We analyze the structural and computational properties of the resulting equilibria.
• For first-price auctions, we show that a unique equilibrium always exists, is well-behaved and can be computed efficiently via tatonnement-style decentralized dynamics.