Generalized first-price auction
Generalized first-price auction
The generalized first-price auction (GFP) is a non-truthful auction mechanism for sponsored search (a.k.a. position auctions). and the mechanism need not possess a (pure) Nash equilibrium. These deficiencies lead to the replacement of the GFP mechanism in practice, and the adoption of alternate auction designs.
Recent work by Hoy et al. and Dütting et al. shows that the deficiencies of the GFP mechanism can be ascribed to its bidding interface, and that adopting a more expressive bidding interface guarantees the existence of an efficient nash-equilibrium under complete information as well as an efficient Bayes-Nash equilibrium under incomplete information.