pith. sign in

arxiv: 2605.31036 · v1 · pith:PR5HILXCnew · submitted 2026-05-29 · 💻 cs.GT · cs.LG

Model Monotonicity in Autobidding Auctions: When Do Better Predictions Lead to Better Outcomes?

classification 💻 cs.GT cs.LG
keywords modelauctionauctionsimprovementsmonotonicityadvertisingbetterbudget
0
0 comments X
read the original abstract

Online advertising platforms rely on machine learning models to predict click-through rates (pCTR) and conversion rates (pCVR) for auction mechanisms. We introduce a novel framework to study the interaction between recommender system model quality, auction format, and autobidder behavior. We formalize when model improvements -- defined via a refinement relation inspired by filtrations in probability theory -- lead to improvements in platform-level Evaluation Criteria Metrics (ECM) such as revenue, welfare, or liquid welfare. Our main contributions are: (1) a formal definition of model improvement based on cluster refinement, and (2) a systematic characterization of ECM monotonicity across different combinations of bidder types (tCPA, max-CPA), auction formats (first-price, second-price, VCG), and budget constraints. We show that first-price auctions with uniform bidding guarantee revenue monotonicity for tCPA bidders without budgets (via Jensen's inequality), while second-price auctions and budget constraints can break this property. We provide full numerical constructions for the non-monotonicity results. Our findings have practical implications for advertising platforms seeking to align model improvements with business outcomes.

This paper has not been read by Pith yet.

discussion (0)

Sign in with ORCID, Apple, or X to comment. Anyone can read and Pith papers without signing in.