Most of the work in auction design literature assumes that bidders behave rationally based on the information available for every individual auction, and the revelation principle enables designers to restrict their efforts to incentive compatible (IC) mechanisms. However, in today's online advertising markets, one of the most important real-life applications of auction design, the data and computational power required to bid optimally are only available to the auction designer, and an advertiser can only participate by setting performance objectives and constraints for its proxy auto-bidder provided by the platform. The prevalence of auto-bidding necessitates a review of auction theory. In this paper, we examine properties of auto-bidding markets through the lens of ROI-constrained value-maximizing campaigns, which are widely adopted in many global-scale online advertising platforms. Through theoretical analysis and empirical experiments on both synthetic and realistic data, we find that second price auction exhibits many undesirable properties (equilibrium multiplicity, computational hardness, exploitability by bidders and auctioneers, instability of bidders' utilities, and interference in A/B testing) and loses its dominant theoretical advantages in single-item scenarios. Some of these phenomena have been identified in literature (for budget-constrained auto-bidders) and widely observed in practice, and we show that they are actually deeply rooted in the property of (single-round) incentive compatibility. Although many complex designs have been proposed in literature, first and second price auctions remain popular in industry. We hope that our work could bring new perspectives to the community and benefit practitioners to attain a better grasp of real-world markets.

翻译：拍卖设计文献中的大部分工作假设竞价者基于每场拍卖的可用信息理性行事，且显示原理使设计者能够将研究限定在激励相容机制中。然而，在当今在线广告市场（拍卖设计最重要的现实应用之一）中，优化竞价所需的数据和计算能力仅掌握在拍卖设计者手中，广告主只能通过平台提供的代理自动出价器设置绩效目标和约束来参与。自动出价的盛行促使我们重新审视拍卖理论。本文通过全球多大规模在线广告平台广泛采用的ROI约束价值最大化广告活动视角，考察自动出价市场的特性。通过理论分析及基于合成数据与真实数据集的实证实验，我们发现第二价格拍卖在单品场景中存在诸多不良特性（均衡多重性、计算复杂性、被竞价者与拍卖者利用的可能性、竞价者效用不稳定及A/B测试干扰），并丧失了其理论优势。这些现象部分已在文献（针对预算约束自动出价者）中被识别并在实践中广泛观察到，我们证明其根源在于（单轮）激励相容性属性。尽管文献已提出多种复杂设计方案，第一价格与第二价格拍卖仍在业界保持主流地位。我们希望本文能为学界提供新视角，并帮助从业者更好地理解真实市场。