Dominant bidding strategy in Mobile App advertising auction

Abstract

The widespread use of intelligent mobile phone has promoted prosperity of mobile App advertising in recent years. Based on existing bidding status, this paper presents the dominant bidding strategy for mobile advertising auction. Firstly, our study characterizes multiple Nash Equilibria resulting from different bidding strategies in wGSP (weighted Generalized Second-Price) auction. Further more, we prove that advertiser’s rank and utility will not decrease by using the dominant bidding strategy. We also consider the situation where the reserve price is set by the mobile advertising platform. It turns out that that advertiser’s payment will be no less than reserve price. Finally, a practical implementation for a virtual market simulates the dynamic bidding process in real world environments.