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About this paper
Ningyuan Li, Zhilin Zhang, Tianyan Long, Yuyao Liu, Rongquan Bai, Yurong Chen, Xiaotie Deng, Pengjie Wang and 3 more
Alibaba Group and Peking University researchers developed a mechanism design for QuanZhanTui, a platform-wide marketing service that unifies ad and organic traffic, proposing the Liquid Payment Auction (LPA). LPA achieves high overall platform objectives, increases revenue, and incentivizes sellers to truthfully report their marketing constraints.
Key insights
- The Liquid Payment Auction (LPA) is proven to achieve the platform's optimal objective, balancing seller welfare (Liquid Welfare) and user experience, at pacing equilibrium.
- LPA is incentive-compatible, a key theoretical contribution, as it ensures sellers truthfully report both their budget and ROI constraints within an auto-bidding environment.
- The introduction of a 'stock-constrained value maximizer' model provides a more realistic representation of e-commerce seller objectives by integrating inventory limits with budget and ROI constraints.
Summary by alphaXiv.
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