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MATLAB CODE PLEASE Consider the following sponsored search auction instance I: 2 slots. The top slot has a known click-through rate (CTR) ctr1 = 1
MATLAB CODE PLEASE
Consider the following sponsored search auction instance I: 2 slots. The top slot has a known click-through rate (CTR) ctr1 = 1 and the bottom slot has a known click-through rate ctr3 = 0.5. 2 advertisers. Advertiser 1 has a private value-per-click v1 = 1 and advertiser 2 has a private value-per-click v2 = 0.5. The payoff of the advertiser (let's call them i, = 1, 2) who is assigned to the top slot is (vi p), where p is the price charged per-click in the top slot. The payoff of in the bottom slot is 0.5 .vi (price o is charged per-click in the bottom slot). Under the Generalized Second-Price (GSP) auction rule: Advertisers are asked to declare their value per click (this doesn't mean that their declarations are truthful:). Advertisers are then ranked according to their declarations and the advertiser with the highest declaration is assigned to the slot with the highest CTR (top slot), the advertiser with the second highest declaration is assigned to the slot with the lowest CTR (bottom slot). In case of a tie, advertiser 1 is allocated to the top slot. The per-click payment p at the top slot), is set to be equal to the declaration of the advertiser assigned to the bottom slot. Assume the following strategy sets (the allowed strategies/reports each player can make) S1 = {0, 0.5, 1} and S2 = {0, 0.5}. Write MATLAB code that computes all Nash equilibria in I, and outputs the social welfare achieved in each of themStep by Step Solution
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