Bayesian Game Analysis Of Sponsored Search Auction Strategy

Since the 21 st century,the sponsored search auction market has developed vigorously.Both search engines and advertisers are looking for bidding strategies that maximize their utility.In the face of more and more complex market environment,advertisers and search engines have different risk attitude preference,and the degree of risk aversion or pursuit of advertisers or search engines affects their quotation strategy.Based on the Bayesian game model under incomplete information,this thesis constructs a sponsored search auction game model considering multiple advertisers and multiple advertising Spaces.Then,considering the risk attitude of advertisers and search engines,the game models of sponsored search auction involving single advertisers and multiple advertisers are analyzed.It is assumed that the bidding price of advertisers is a linear function of the valuation of advertising space,and the reserve price of search engines is a linear function of the cost of advertising space.The equilibrium bid price strategy of advertisers and the equilibrium reserve price strategy of search engines are solved.On this basis,the influence of the risk attitude of advertisers and search engines on the bid price of advertisers and the reserve price of search engines is studied.And the type of risk attitude of both parties,the effective trading area of both parties is the largest.When multiple advertisers participate,whether the number of advertisers will affect the equilibrium bidding strategy of advertisers and the equilibrium reserve price of search engines.The main results include:(1)In a single advertiser to participate in a sponsored search auction,when advertiser bid price strategy and the search engine’s reserve price strategy to meet the Bayesian Nash equilibrium,the balance of risk attitude and advertiser own advertisers bid price strategy has no obvious correlation between,the balance of the search engine’s risk attitude and advertiser bid price is positively related to relationship.There is no obvious correlation between the risk attitude of search engines and the equilibrium reserve price of search engines,but there is a positive correlation between the risk attitude of advertiser and the equilibrium reserve price of search engines.(2)In the sponsored search auction in which a single advertiser participates,when the advertiser’s risk attitude and the search engine’s risk attitude are both risk-averse,the effective trading area of both parties reaches the highest.(3)In the sponsored search auction involving multiple advertisers,when the bidding strategy of advertisers and the reserve price strategy of search engines meet the Bayesian Nash equilibrium,there is no obvious correlation between the optimal response function of advertisers’ bidding price to the reserve price of search engines and advertisers’ risk attitude.The optimal response function of search engine’s reserve price to advertiser bid price is positively correlated with search engine’s risk attitude.The optimal response function of advertiser bid price to search engine retention price is negatively correlated with the number of advertisers participating.The optimal response function of search engine reserve price to advertiser bid price is independent of the number of advertisers participating.The existing research basically assumes that the risk attitude of advertisers and search engines is risk-neutral.The model established in this thesis considers the expected utility of advertisers and search engines in the case of risk aversion or risk pursuit,and studies the influence of the risk attitude of advertisers and search engines on the bidding strategy of both parties,which will have more practical significance and further enrich the theory of sponsored search auction.Then it studies the sponsored search auction problem participated by multiple advertisers considering risk attitude,and analyzes the impact of advertisers’ risk attitude on advertisers’ optimal quotation and search engine utility.It provides a theoretical reference for advertisers’ quotation strategy and search engine ranking mechanism.