Reservation Exchange Markets for Internet Advertising

Authors Gagan Goel, Stefano Leonardi, Vahab Mirrokni, Afshin Nikzad, Renato Paes-Leme

Thumbnail PDF


  • Filesize: 464 kB
  • 13 pages

Document Identifiers

Author Details

Gagan Goel
Stefano Leonardi
Vahab Mirrokni
Afshin Nikzad
Renato Paes-Leme

Cite AsGet BibTex

Gagan Goel, Stefano Leonardi, Vahab Mirrokni, Afshin Nikzad, and Renato Paes-Leme. Reservation Exchange Markets for Internet Advertising. In 43rd International Colloquium on Automata, Languages, and Programming (ICALP 2016). Leibniz International Proceedings in Informatics (LIPIcs), Volume 55, pp. 142:1-142:13, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2016)


Internet display advertising industry follows two main business models. One model is based on direct deals between publishers and advertisers where they sign legal contracts containing terms of fulfillment for a future inventory. The second model is a spot market based on auctioning page views in real-time on advertising exchange (AdX) platforms such as DoubleClick's Ad Exchange, RightMedia, or AppNexus. These exchanges play the role of intermediaries who sell items (e.g. page-views) on behalf of a seller (e.g. a publisher) to buyers (e.g., advertisers) on the opposite side of the market. The computational and economics issues arising in this second model have been extensively investigated in recent times. In this work, we consider a third emerging model called reservation exchange market. A reservation exchange is a two-sided market between buyer orders for blocks of advertisers' impressions and seller orders for blocks of publishers' page views. The goal is to match seller orders to buyer orders while providing the right incentives to both sides. In this work we first describe the important features of mechanisms for efficient reservation exchange markets. We then address the algorithmic problems of designing revenue sharing schemes to provide a fair division between sellers of the revenue collected from buyers. A major conceptual contribution of this work is in showing that even though both clinching ascending auctions and VCG mechanisms achieve the same outcome from a buyer perspective, however, from the perspective of revenue sharing among sellers, clinching ascending auctions are much more informative than VCG auctions.
  • Reservation Markets
  • Internet Advertising
  • Two-sided Markets
  • Clinching Auction
  • Envy-free allocations


  • Access Statistics
  • Total Accesses (updated on a weekly basis)
    PDF Downloads