  In classic auction theory, reserve prices are known to be effective for
improving revenue for the auctioneer against quasi-linear utility maximizing
bidders. The introduction of reserve prices, however, usually do not help
improve total welfare of the auctioneer and the bidders. In this paper, we
focus on value maximizing bidders with return on spend constraints -- a
paradigm that has drawn considerable attention recently as more advertisers
adopt auto-bidding algorithms in advertising platforms -- and show that the
introduction of reserve prices has a novel impact on the market. Namely, by
choosing reserve prices appropriately the auctioneer can improve not only the
total revenue but also the total welfare. Our results also demonstrate that
reserve prices are robust to bidder types, i.e., reserve prices work well for
different bidder types, such as value maximizers and utility maximizers,
without using bidder type information. We generalize these results for a
variety of auction mechanisms such as VCG, GSP, and first-price auctions.
Moreover, we show how to combine these results with additive boosts to improve
the welfare of the outcomes of the auction further. Finally, we complement our
theoretical observations with an empirical study confirming the effectiveness
of these ideas using data from online advertising auctions.
