Faculty Advisor or Committee Member

Stephan Sturm, Advisor

Faculty Advisor or Committee Member

Marcel Y. Blais, Advisor

Identifier

etd-042816-102848

Abstract

One goal of every business is to save money, and building strategies that work to minimize spending and maximize profit is key to the success of a company. Cidewalk is a mobile advertisement company that wished to implement an optimal bidding strategy to help reduce the company's cost and in turn maximize their profits. To accomplish this goal we collected market data which was then analyzed to identify the distribution of second best bids, which is the price Cidewalk pays for an advertisement space by bidding in a Vickrey auction. The optimal bidding model was then implemented through a simulation together with Bayesian updating methods to ensure the model would be responsive to changes in the market. The model's performance was evaluated through the simulation and it was discovered that throughout one day the implemented model yielded 17% savings when compared to Cidewalk's current bidding model.

Publisher

Worcester Polytechnic Institute

Degree Name

MS

Department

Mathematical Sciences

Project Type

Masters report

Date Accepted

2016-04-28

Accessibility

Unrestricted

Subjects

Bayesian updating, calibration, mobile advertisement markets, optimal bidding model, Vickrey auctions

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