We analyze the economic stability and dynamic manipulation of vindictive strategies in conjunction with forward-looking cooperative
bidders in Sponsored Search Auction. We investigate different vindictive strategies of different rationalities : malicious,
conservative and selective. In a malicious vindictive strategy, the bidder forces his competitors to pay more by bidding just
one cent lower of his competitor’s bid. We show that Nash Equilibrium is vulnerable even there is one malicious vindictive
bidder. However, on bidder’s perspective, he has not much incentive to use a malicious vindictive strategy. A conservative
vindictive bidding strategy makes a bidder never sacrifices his own benefit to take revenge on his competitor. Under this
strategy, we prove that there always exists an output truthful Nash Equilibrium. However, it may not always be the unique
equilibrium. Lastly, we investigate a selective vindictive strategy that a bidder rationally chooses to bid cooperatively
or vindictively. The bidder takes a vindictive strategy only if the bidder who gets one position higher has a larger private
value. We prove that selective vindictive strategy always results in a unique truthful Nash Equilibrium in conjunction with
forward looking cooperative bidders. Interestingly, forward looking strategy gives the same payment as VCG mechanism if all
the bidders takes it. However, the bidder prefers selective vindictive strategy while the auctioneer’s revenue reach maximum
when all the bidders takes the selective vindictive strategy.