Individual Fairness in Sponsored Search Auctions.

Fairness in advertising is a topic of particular interest in both the computer science and economics literatures, supported by theoretical and empirical observations. We initiate the study of tradeoffs between individual fairness and performance in online advertising, where advertisers place bids on ad slots for each user and the platform must determine which ads to display. Our main focus is to investigate the "cost of fairness": more specifically, whether a fair allocation mechanism can achieve utility close to that of a utility-optimal unfair mechanism. Motivated by practice, we consider both the case of many advertisers in a single category, e.g. sponsored results on a job search website, and ads spanning multiple categories, e.g. personalized display advertising on a social networking site, and show the tradeoffs are inherently different in these settings. We prove lower and upper bounds on the cost of fairness for each of these settings. For the single category setting, we show constraints on the "fairness" of advertisers' bids are necessary to achieve good utility. Moreover, with bid fairness constraints, we construct a mechanism that simultaneously achieves a high utility and a strengthening of typical fairness constraints that we call total variation fairness. For the multiple category setting, we show that fairness relaxations are necessary to achieve good utility. We consider a relaxed definition based on user-specified category preferences that we call user-directed fairness, and we show that with this fairness notion a high utility is achievable. Finally, we show that our mechanisms in the single and multiple category settings compose well, yielding a high utility combined mechanism that satisfies user-directed fairness across categories and conditional total variation fairness within categories.