Many ad servers running GSP auctions tend to charge a $0.01 increment on the second price. I was wondering if there was any theoretical basis for this, or is it just a way for ad servers to make a little extra money at the expense of advertisers?
Although it probably wouldn't have much effect on incentives in practice, it seems that doing this breaks incentive compatibility in a true Vickrey auction, and breaks the equilibrium properties of a GSP auction.
I have heard the case made that this is a tie breaking rule, in which case what do you do when two bidders bid the exact same amount? You can't charge $0.01 extra because it would exceed their maximum bid. In which case this doesn't address the breaking of incentive compatibility.