Pricing Algorithms For a Two-sided Internet Advertisement Market

The Google AdSense Program is a successful internet advertisement program where Google places contextual adverts on third-party websites and shares the resulting revenue with each publisher. Advertisers have budgets and bid on ad slots while publishers set reserve prices for the ad slots on their websites. Following previous modelling efforts, we model the program as a two-sided market with advertisers on one side and publishers on the other. We show a reduction from the Generalised Assignment Problem (GAP) to the problem of computing the revenue maximising allocation and pricing of publisher slots under a first-price auction. GAP is APX-hard but a (1-1/e) approximation is known. We compute truthful and revenue-maximizing prices and allocation of ad slots to advertisers under a second-price auction. The auctioneer's revenue is within (1-1/e) second-price optimal.

Load Profiling for Efficient Route Selection in Multi-Class Networks

High-speed networks, such as ATM networks, are expected to support diverse Quality of Service (QoS) constraints, including real-time QoS guarantees. Real-time QoS is required by many applications such as those that involve voice and video communication. To support such services, routing algorithms that allow applications to reserve the needed bandwidth over a Virtual Circuit (VC) have been proposed. Commonly, these bandwidth-reservation algorithms assign VCs to routes using the least-loaded concept, and thus result in balancing the load over the set of all candidate routes. In this paper, we show that for such reservation-based protocols|which allow for the exclusive use of a preset fraction of a resource's bandwidth for an extended period of time-load balancing is not desirable as it results in resource fragmentation, which adversely affects the likelihood of accepting new reservations. In particular, we show that load-balancing VC routing algorithms are not appropriate when the main objective of the routing protocol is to increase the probability of finding routes that satisfy incoming VC requests, as opposed to equalizing the bandwidth utilization along the various routes. We present an on-line VC routing scheme that is based on the concept of "load profiling", which allows a distribution of "available" bandwidth across a set of candidate routes to match the characteristics of incoming VC QoS requests. We show the effectiveness of our load-profiling approach when compared to traditional load-balancing and load-packing VC routing schemes.

Trade & Cap: A Customer-Managed, Market-Based System for Trading Bandwidth Allowances at a Shared Link

We propose Trade & Cap (T&C), an economics-inspired mechanism that incentivizes users to voluntarily coordinate their consumption of the bandwidth of a shared resource (e.g., a DSLAM link) so as to converge on what they perceive to be an equitable allocation, while ensuring efficient resource utilization. Under T&C, rather than acting as an arbiter, an Internet Service Provider (ISP) acts as an enforcer of what the community of rational users sharing the resource decides is a fair allocation of that resource. Our T&C mechanism proceeds in two phases. In the first, software agents acting on behalf of users engage in a strategic trading game in which each user agent selfishly chooses bandwidth slots to reserve in support of primary, interactive network usage activities. In the second phase, each user is allowed to acquire additional bandwidth slots in support of presumed open-ended need for fluid bandwidth, catering to secondary applications. The acquisition of this fluid bandwidth is subject to the remaining "buying power" of each user and by prevalent "market prices" – both of which are determined by the results of the trading phase and a desirable aggregate cap on link utilization. We present analytical results that establish the underpinnings of our T&C mechanism, including game-theoretic results pertaining to the trading phase, and pricing of fluid bandwidth allocation pertaining to the capping phase. Using real network traces, we present extensive experimental results that demonstrate the benefits of our scheme, which we also show to be practical by highlighting the salient features of an efficient implementation architecture.