A HYBRID ALGORITHM FOR THE ADWORDS PROBLEM

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Abstract

<p>The adwords problem (or the ad-auctions problem) is an online problem which decides allocations of advertisements to search words. The search words arrive one-by-one and a search engine decides what advertisement to display upon arrival of each search word. The owner of the search engine receives revenues from advertisers and the objective of the adwords problem is to maximize the sum of revenues. In this paper, we propose a hybrid algorithm for the adwords problem by combining two algorithms called a greedy algorithm and a PD algorithm. The proposed algorithm has a parameter k ∈ [0,1] and a competitive ratio of the algorithm is 1/(k (e/e-1) + 2 (1-k)) under the small bid assumption. We conduct preliminary numerical experiments, and we observe that the proposed algorithm outperforms other two algorithms with a suitable parameter k.</p>

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