Abstract

In this paper we present an advanced bidding agent that participates in first-price sealed bid auctions to allocate advertising space on BluScreen – an experimental public advertisement system that detects users through the presence of their Bluetooth enabled devices. Our bidding agent is able to build probabilistic models of both the behaviour of users who view the adverts, and the auctions that it participates within. It then uses these models to maximise the exposure that its adverts receive. We evaluate the effectiveness of this bidding agent through simulation against a range of alternative selection mechanisms including a simple bidding strategy, random allocation, and a centralised optimal allocation with perfect foresight. Our bidding agent significantly outperforms both the simple bidding strategy and the random allocation, and in a mixed population of agents it is able to expose its adverts to 25 % more users than the simple bidding strategy. Moreover, its performance is within 7.5 % of that of the centralised optimal allocation despite the highly uncertain environment in which it must operate.

Citations