Fuzzy logic based effective bidding range computation and bidder's behavior estimation in keyword auctions

Abstract

Keyword auctions are being used to sell the positions along the side of organic results shown by search engine when user types a keyword or a query related to keyword in a search engine. It has been a huge revenue generating arena for search engines since last decade. Irrespective of the great success of these types of auctions there are certain research issues which are still in inchoate state and needs urgent attention of research communities e.g. how much a naive bidder should bid without referring to any complex agents, how much he/she will be minimally charged for the participation etc. In this paper we propose a novel scheme to compute effective bidding range based on fuzzy logic which has threefold advantages. Firstly, it provides bidders with the information of his effective range of bids which can ensure his chances of participation and winning. Secondly, it provides auctioneer with the information about bidders bidding behavior which can help in predicting their revenues and lastly it can enforce the minimum reservation prices in natural way. Experimental results are presented to illustrate working of the proposed scheme.