We examine trade-offs among stakeholders in ad auctions. Our metrics are the revenue for the utility of the auctioneer, the number of clicks for the utility of the users and the welfare for the utility of the advertisers. We show how to optimize linear combinations of the stakeholder utilities, showing that these can be tackled through a GSP auction with a per-click reserve price. We then examine constrained optimization of stakeholder utilities.We use simulations and analysis of real-world sponsored search auction data to demonstrate the feasible trade-offs, examining the effect of changing the allowed number of ads on the utilities of the stakeholders. We investigate both short term effects, when the players do not have the time to modify their behavior, and long term equilibrium conditions.Finally, we examine a combinatorially richer constrained optimization problem, where there are several possible allowed configurations (templates) of ad formats. This model captures richer ad formats, which allow using the available screen real estate in various ways. We show that two natural generalizations of the GSP auction rules to this domain are poorly behaved, resulting in not having a symmetric Nash equilibrium or having one with poor welfare. We also provide positive results for restricted cases.

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Purpose The purpose of this paper is to report on empirical work conducted to open up algorithmic interpretability and transparency. In recent years, significant concerns have arisen regarding the increasing pervasiveness of algorithms and the impact of automated decision-making in our lives. Particularly problematic is the lack of transparency surrounding the development of these algorithmic systems and their use. It is often suggested that to make algorithms more fair, they should be made more transparent, but exactly how this can be achieved remains unclear. Design/methodology/approach An empirical study was conducted to begin unpacking issues around algorithmic interpretability and transparency. The study involved discussion-based experiments centred around a limited resource allocation scenario which required participants to select their most and least preferred algorithms in a particular context. In addition to collecting quantitative data about preferences, qualitative data captured participants’ expressed reasoning behind their selections. Findings Even when provided with the same information about the scenario, participants made different algorithm preference selections and rationalised their selections differently. The study results revealed diversity in participant responses but consistency in the emphasis they placed on normative concerns and the importance of context when accounting for their selections. The issues raised by participants as important to their selections resonate closely with values that have come to the fore in current debates over algorithm prevalence. Originality/value This work developed a novel empirical approach that demonstrates the value in pursuing algorithmic interpretability and transparency while also highlighting the complexities surrounding their accomplishment.