Modified second-price auctions in real-time bidding

Sammanfattning: The surge in revenue from real-time auctions for online display advertisement has spurred great research interest into how to design optimal mechanisms for these auctions, with respect to both buyers and sellers. This thesis focuses on some recent proposals on how to modify the Vickrey auction, which has been dominating the world of real-time auctions for the past decade, in order to better accommodate for the dynamics of this specific auction environment while also increasing the revenue of the seller. Specifically, this thesis aims to evaluate the so-called boosted second-price auction on a dataset provided by Adform, which is a global advertisement technology company based in Copenhagen. In this specific case, the implementation of the boosted second-price auction does not seem to be justified. The changes in allocation as a result of implementing the mechanism are unstable and hard to constrain, while there doesn't seem to be a reason to assume that the Vickrey auction does not already achieve an ecient allocation. All of the code used is provided in the following GitHub repository: https://github.com/Ostigland/econ-rtb