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Probability and Computational Finance Seminar
Savas Dayanik
Bilkent University
Title: Bidding for multiple keywords in search-based advertising

Abstract: Search-based advertisement services provided by Google and Yahoo allow small-to-medium size companies to use more effectively their advertisement budgets to target their potential customers. The advertisers manage this by bidding for a place on the result pages for several search keywords relevant to their products and services. The customer flow rates to the advertiser business pages change with the placements of advertisements on the pages, which are determined by the bidding prices of the advertisers in closed second-price auctions. We propose a reduced-form model for the bidding process and calculate optimal dynamic bidding prices for several keywords subject to a single daily advertisement budget by using stochastic dynamic programming. (This is joint work with Semih O. Sezer, Sabanci University, Turkey.)

Date: Monday, September 14, 2015
Time: 4:30 pm
Location: Wean Hall 8220
Submitted by:  Steve Shreve