Equilibrium Bids in Sponsored Search Auctions: Theory and Evidence Report as inadecuate




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Abstract

This paper presents a game theoretic analysis of the generalized second price auc- tion that the company Overture operated in 2004 to sell sponsored search listings on its search engine. We present results that indicate that this auction has a multi- plicity of Nash equilibria. We also show that weak dominance arguments do not in general select a unique Nash equilibrium. We then analyze bid data assuming that advertisers choose Nash equilibrium bids. We offer some preliminary conclu- sions about advertisers’ true willingness to bid for sponsored search listings. We find that advertisers’ true willingness to bid is multi-dimensional and decreasing in listing position.



Item Type: MPRA Paper -

Original Title: Equilibrium Bids in Sponsored Search Auctions: Theory and Evidence-

Language: English-

Keywords: auctions, sponsored search.-

Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions-





Author: Börgers, Tilman

Source: https://mpra.ub.uni-muenchen.de/29125/







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