Bounding the inefficiency of outcomes in generalized second price auctions

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The Generalized Second Price (GSP) auction is the primary auction used for monetizing the use of the Internet. It is well-known that truthtelling is not a dominant strategy in this auction and that inefficient equilibria can arise. Edelman et al. (2007) [11] and Varian (2007) [36] show that an efficient equilibrium always exists in the fu...More