An Optimal Mechanism for Sponsored Search Auctions on the Web and Comparison With Other Mechanisms

In this paper, we first describe a framework to model the sponsored search auction on the web as a mechanism design problem. Using this framework, we describe two well-known mechanisms for sponsored search auction-Generalized Second Price (GSP) and Vickrey-Clarke-Groves (VCG). We then derive a new mechanism for sponsored search auction which we call optimal (OPT) mechanism. The OPT mechanism maximizes the search engine's expected revenue, while achieving Bayesian incentive compatibility and individual rationality of the advertisers. We then undertake a detailed comparative study of the mechanisms GSP, VCG, and OPT. We compute and compare the expected revenue earned by the search engine under the three mechanisms when the advertisers are symmetric and some special conditions are satisfied. We also compare the three mechanisms in terms of incentive compatibility, individual rationality, and computational complexity. Note to Practitioners-The advertiser-supported web site is one of the successful business models in the emerging web landscape. When an Internet user enters a keyword (i.e., a search phrase) into a search engine, the user gets back a page with results, containing the links most relevant to the query and also sponsored links, (also called paid advertisement links). When a sponsored link is clicked, the user is directed to the corresponding advertiser's web page. The advertiser pays the search engine in some appropriate manner for sending the user to its web page. Against every search performed by any user on any keyword, the search engine faces the problem of matching a set of advertisers to the sponsored slots. In addition, the search engine also needs to decide on a price to be charged to each advertiser. Due to increasing demands for Internet advertising space, most search engines currently use auction mechanisms for this purpose. These are called sponsored search auctions. A significant percentage of the revenue of Internet giants such as Google, Yahoo!, MSN, etc., comes from sponsored search auctions. In this paper, we study two auction mechanisms, GSP and VCG, which are quite popular in the sponsored auction context, and pursue the objective of designing a mechanism that is superior to these two mechanisms. In particular, we propose a new mechanism which we call the OPT mechanism. This mechanism maximizes the search engine's expected revenue subject to achieving Bayesian incentive compatibility and individual rationality. Bayesian incentive compatibility guarantees that it is optimal for each advertiser to bid his/her true value provided that all other agents also bid their respective true values. Individual rationality ensures that the agents participate voluntarily in the auction since they are assured of gaining a non-negative payoff by doing so.

Design of an optimal auction for sponsored search auctions

In this paper we first describe a framework to model the sponsored search auction on the web as a mechanism design problem. Using this framework, we design a novel auction which we call the OPT (optimal) auction. The OPT mechanism maximizes the search engine's expected revenue while achieving Bayesian incentive compatibility and individual rationality of the advertisers. We show that the OPT mechanism is superior to two of the most commonly used mechanisms for sponsored search namely (1) GSP (Generalized Second Price) and (2) VCG (Vickrey-Clarke-Groves). We then show an important revenue equivalence result that the expected revenue earned by the search engine is the same for all the three mechanisms provided the advertisers are symmetric and the number of sponsored slots is strictly less than the number of advertisers.

The process of technological innovations in small enterprises: the Indian way

This paper probes how two small foundries in Belgaum, Karnataka State, India, have achieved technological innovations successfully based on their technological capability and customer needs, enabling them to sail through the competitive environment. This study brought out that technically qualified entrepreneurs of both the foundries have carried out technological innovations, mainly due to their self-motivation and self-efforts. Changing product designs, as desired or directed by the customers, cost reduction, quality improvement and import substitution through reverse engineering are the characteristics of these technological innovations. These incremental innovations have enabled the entrepreneurs of the two foundries to enhance competitiveness, grow in the domestic market and penetrate the international market and grow in size over time.

The process of technological innovations in small enterprises: the Indian way

This paper probes how two small foundries in Belgaum, Karnataka State, India, have achieved technological innovations successfully based on their technological capability and customer needs, enabling them to sail through the competitive environment. This study brought out that technically qualified entrepreneurs of both the foundries have carried out technological innovations, mainly due to their self-motivation and self-efforts. Changing product designs, as desired or directed by the customers, cost reduction, quality improvement and import substitution through reverse engineering are the characteristics of these technological innovations. These incremental innovations have enabled the entrepreneurs of the two foundries to enhance competitiveness, grow in the domestic market and penetrate the international market and grow in size over time.

The Asian elephants Elephas maximus of Cat Tien National Park, Vietnam: status and conservation of a vanishing population

This study updates the status and conservation of the Endangered Asian elephant Elephas maximus in Cat Tien National Park, Vietnam. Line transect indirect surveys, block surveys for elephant signs, village surveys of elephant-human conflict incidents, guard-post surveys for records of sightings, and surveys of elephant food plants were undertaken during the dry and wet seasons of 2001. A minimum of 11 elephants and a maximum of 15-17 elephants was estimated for c. 500 km2 of the Park and its vicinity. The elephants are largely confined to the southern boundary of the Park and make extensive use of the adjoining La Nga State Forest Enterprises. During the dry season the elephants depend on at least 26 species of wild and cultivated plants, chiefly the fruits of cashew. Most of the villages surveyed reported some elephant-human conflict. Two adult male elephants seem to cover a large area to raid crops, whereas the family groups restrict themselves to a few villages; overall, the conflict is not serious. Since 2001 there have been no reports of any deaths or births of elephants in the Park. We make recommendations for habitat protection and management, increasing the viability of the small population, reducing elephant-human conflicts, and improving the chances of survival of the declining elephants of this Park. The Government has now approved an Action Plan for Urgent Conservation Areas in Vietnam that calls for the establishment of three elephant conservation areas in the country, including Cat Tien National Park.

Multi-Armed Bandit Mechanisms for Multi-Slot Sponsored Searth Auctions

In pay-per click sponsored search auctions which are currently extensively used by search engines, the auction for a keyword involves a certain number of advertisers (say k) competing for available slots (say m) to display their ads. This auction is typically conducted for a number of rounds (say T). There are click probabilities mu_ij associated with agent-slot pairs. The search engine's goal is to maximize social welfare, for example, the sum of values of the advertisers. The search engine does not know the true value of an advertiser for a click to her ad and also does not know the click probabilities mu_ij s. A key problem for the search engine therefore is to learn these during the T rounds of the auction and also to ensure that the auction mechanism is truthful. Mechanisms for addressing such learning and incentives issues have recently been introduced and would be referred to as multi-armed-bandit (MAB) mechanisms. When m = 1,characterizations for truthful MAB mechanisms are available in the literature and it has been shown that the regret for such mechanisms will be O(T^{2/3}). In this paper, we seek to derive a characterization in the realistic but nontrivial general case when m > 1 and obtain several interesting results.

A Nash Bargaining Approach to Retention Enhancing Bid Optimization in Sponsored Search Auctions with Discrete Bids

Bid optimization is now becoming quite popular in sponsored search auctions on the Web. Given a keyword and the maximum willingness to pay of each advertiser interested in the keyword, the bid optimizer generates a profile of bids for the advertisers with the objective of maximizing customer retention without compromising the revenue of the search engine. In this paper, we present a bid optimization algorithm that is based on a Nash bargaining model where the first player is the search engine and the second player is a virtual agent representing all the bidders. We make the realistic assumption that each bidder specifies a maximum willingness to pay values and a discrete, finite set of bid values. We show that the Nash bargaining solution for this problem always lies on a certain edge of the convex hull such that one end point of the edge is the vector of maximum willingness to pay of all the bidders. We show that the other endpoint of this edge can be computed as a solution of a linear programming problem. We also show how the solution can be transformed to a bid profile of the advertisers.

New Ventures’ influence on the Growth of SME Employment, Production and Exports in India: Does Institutional Credit matter?

New ventures are considered to be a major source of small firm growth. In Indian context the contribution of new ventures in terms of new employment, production and exports has largely remained unexplored. It is equally important and unexplored, the significance of the contribution of bank credit to the growth of new ventures in India. This paper is an attempt to throw light on these two aspects. The research is based on secondary data of the liberalized period provided by Ministry of Micro, Small and Medium Enterprises, Government of India and Reserve Bank of India. To analyze the influence of bank credit growth on new ventures and the influence of new ventures on growth of additional employment, additional production and additional exports, we used a Bi-Variate Vector Auto Regression. Based on the model generated, Granger causality tests are conducted to obtain the results. The study found that rate of growth of bank credit causes the number of new ventures, implying any increase in the rate of growth of bank credit will be beneficial to the growth of new ventures. The study also concluded that new ventures are not causing the growth of additional employment or additional production. However new ventures cause the growth of additional exports. This is reasonable as entrepreneurs start their new ventures with minimum possible employment and relatively low rate of capacity utilization and they come up to take advantage of the process of globalization by catering to the international market.

Bidding Dynamics of Rational Advertisers in Sponsored Search Auctions on the Web

In this paper, we address a key problem faced by advertisers in sponsored search auctions on the web: how much to bid, given the bids of the other advertisers, so as to maximize individual payoffs? Assuming the generalized second price auction as the auction mechanism, we formulate this problem in the framework of an infinite horizon alternative-move game of advertiser bidding behavior. For a sponsored search auction involving two advertisers, we characterize all the pure strategy and mixed strategy Nash equilibria. We also prove that the bid prices will lead to a Nash equilibrium, if the advertisers follow a myopic best response bidding strategy. Following this, we investigate the bidding behavior of the advertisers if they use Q-learning. We discover empirically an interesting trend that the Q-values converge even if both the advertisers learn simultaneously.

Modern energy access to all in rural India: An integrated implementation strategy

Expanding energy access to the rural population of India presents a critical challenge for its government. The presence of 364 million people without access to electricity and 726 million who rely on biomass for cooking indicate both the failure of past policies and programs, and the need for a radical redesign of the current system. We propose an integrated implementation framework with recommendations for adopting business principles with innovative institutional, regulatory, financing and delivery mechanisms. The framework entails establishment of rural energy access authorities and energy access funds, both at the national and regional levels, to be empowered with enabling regulatory policies, capital resources and the support of multi-stakeholder partnership. These institutions are expected to design, lead, manage and monitor the rural energy interventions. At the other end, trained entrepreneurs would be expected to establish bioenergy-based micro-enterprises that will produce and distribute energy carriers to rural households at an affordable cost. The ESCOs will function as intermediaries between these enterprises and the international carbon market both in aggregating carbon credits and in trading them under CDM. If implemented, such a program could address the challenges of rural energy empowerment by creating access to modern energy carriers and climate change mitigation. (C) 2011 Elsevier Ltd. All rights reserved.

Population, globalization and urbanization: Trends and underlying prosesses

Third World hinterlands provide most of the settings in which the quality of human life has improved the least over the decade since Our Common Future was published. This low quality of life promotes a desire for large number of offspring, fuelling population growth and an exodus to the urban centres of the Third World, Enhancing the quality of life of these people in ways compatible with the health of their environments is therefore the most significant of the challenges from the perspective of sustainable development. Human quality of life may be viewed in terms of access to goods, services and a satisfying social role. The ongoing processes of globalization are enhancing flows of goods worldwide, but these hardly reach the poor of Third World countrysides. But processes of globalization have also vastly improved everybody's access to Information, and there are excellent opportunities of putting this to good use to enhance the quality of life of the people of Third World countrysides through better access to education and health. More importantly, better access to information could promote a more satisfying social role through strengthening grass-roots involvement in development planning and management of natural resources. I illustrate these possibilities with the help of a series of concrete experiences form the south Indian state of Kerala. Such an effort does not call for large-scare material inputs, rather it calls for a culture of inform-and-share in place place of the prevalent culture of control-and-command. It calls for openness and transparency in transactions involving government agencies, NGOs, and national and transnational business enterprises. It calls for acceptance of accountability by such agencies.

Truthful multi-armed bandit mechanisms for multi-slot sponsored search auctions

In pay-per-click sponsored search auctions which are currently extensively used by search engines, the auction for a keyword involves a certain number of advertisers (say k) competing for available slots (say m) to display their advertisements (ads for short). A sponsored search auction for a keyword is typically conducted for a number of rounds (say T). There are click probabilities mu(ij) associated with each agent slot pair (agent i and slot j). The search engine would like to maximize the social welfare of the advertisers, that is, the sum of values of the advertisers for the keyword. However, the search engine does not know the true values advertisers have for a click to their respective advertisements and also does not know the click probabilities. A key problem for the search engine therefore is to learn these click probabilities during the initial rounds of the auction and also to ensure that the auction mechanism is truthful. Mechanisms for addressing such learning and incentives issues have recently been introduced. These mechanisms, due to their connection to the multi-armed bandit problem, are aptly referred to as multi-armed bandit (MAB) mechanisms. When m = 1, exact characterizations for truthful MAB mechanisms are available in the literature. Recent work has focused on the more realistic but non-trivial general case when m > 1 and a few promising results have started appearing. In this article, we consider this general case when m > 1 and prove several interesting results. Our contributions include: (1) When, mu(ij)s are unconstrained, we prove that any truthful mechanism must satisfy strong pointwise monotonicity and show that the regret will be Theta T7) for such mechanisms. (2) When the clicks on the ads follow a certain click precedence property, we show that weak pointwise monotonicity is necessary for MAB mechanisms to be truthful. (3) If the search engine has a certain coarse pre-estimate of mu(ij) values and wishes to update them during the course of the T rounds, we show that weak pointwise monotonicity and type-I separatedness are necessary while weak pointwise monotonicity and type-II separatedness are sufficient conditions for the MAB mechanisms to be truthful. (4) If the click probabilities are separable into agent-specific and slot-specific terms, we provide a characterization of MAB mechanisms that are truthful in expectation.

Corporate social responsibilities of Indian public sector enterprises-a case study of Bharat Heavy Electricals Limited (BHEL)

The high level of public accountability attached to Public Sector Enterprises as a result of public ownership makes them socially responsible. The Committee of Public Undertakings in 1992 examined the issue relating to social obligations of Central Public Sector Enterprises and observed that ``being part of the `State', every Public Sector enterprise has a moral responsibility to play an active role in discharging the social obligations endowed on a welfare state, subject to the financial health of the enterprise''. It issued the Corporate Social Responsibility Guidelines in 2010 where all Central Public Enterprises, through a Board Resolution, are mandated to create a CSR budget as a specified percentage of net profit of the previous year. This paper examines the CSR activities of the biggest engineering public sector organization in India, Bharath Heavy Electricals Limited. The objectives are twofold, one, to develop a case study of the organization about the funds allocated and utilized for various CSR activities, and two, to examine its status with regard to other organizations, the 2010 guidelines, and the local socio-economic development. Secondary data analysis results show three interesting trends. One, it reveals increasing organizational social orientation with the formal guidelines in place. Two, Firms can no longer continue to exploit environmental resources and escape from their responsibilities by acting separate entities regardless of the interest of the society and Three the thrust of CSR in public sector is on inclusive growth, sustainable development and capacity building with due attention to the socio-economic needs of the neglected and marginalized sections of the society.