Sponsored search advertising is a significant revenue source for search engines.To ameliorate revenues,search engines often set fixed or variable reserve price to in influence advertisers' bidding. This paper studies the optimal reserve price for a generalized second-price auction(GSP) under both static and dynamic settings.We show that if advertisers' per-click value has an increasing generalized failure rate,the search engine's revenue rate is quasi-concave and hence there exists an optimal reserve price under both settings.Different from a static GSP auction where the optimal reserve price is proved to be constant,in a dynamic setting the optimal reserve price is dependent on not only advertisers' per-click values,but also the number of ad links sold.A search engine should gradually raise reserve price as more qualified advertisers arrive,and maintain the same threshold after all first-page positions are occupied.
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