Position Auctions with Consumer Search
This paper examines a model in which advertisers bid for "sponsored-link" positions on a search engine. The value advertisers derive from each position is endogenized as coming from sales to a population of consumers who make rational inferences about rm qualities and search optimally....
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
| Published: |
Harvard University by the MIT Press
2011
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| Online Access: | http://hdl.handle.net/1721.1/64696 https://orcid.org/0000-0003-3164-0855 |
| Summary: | This paper examines a model in which advertisers bid for "sponsored-link" positions on
a search engine. The value advertisers derive from each position is endogenized as coming
from sales to a population of consumers who make rational inferences about rm qualities
and search optimally. Consumer search strategies, equilibrium bidding, and the welfare
benefits of position auctions are analyzed. Implications for reserve prices and a number of other auction design questions are discussed. |
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