Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords Export

@article{Edelman_2007_InternetAdvertising, abstract = {We investigate the ” generalized second-price” (GSP) auction, a new mechanism used by search engines to sell online advertising. Although GSP looks similar to the Vickrey-Clarke-Groves (VCG) mechanism, its properties are very different. Unlike the VCG mechanism, GSP generally does not have an equilibrium in dominant strategies, and truth-telling is not an equilibrium of GSP. To analyze the properties of GSP, we describe the generalized English auction that corresponds to GSP and show that it has a unique equilibrium. This is an ex post equilibrium, with the same payoffs to all players as the dominant strategy equilibrium of VCG.}, author = {Edelman, Benjamin and Ostrovsky, Michael and Schwarz, Michael}, citeulike-article-id = {2970391}, citeulike-linkout-0 = {http://www.atypon-link.com/doi/abs/10.1257/aer.97.1.242}, journal = {American Economic Reveiw}, keywords = {advertising, auctions, internet\_auctions, paper\_02\_search\_engine\_competition, search\_engines, vcg}, number = {1}, pages = {242--259}, posted-at = {2008-07-07 16:24:45}, priority = {2}, title = {Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords}, url = {http://www.atypon-link.com/doi/abs/10.1257/aer.97.1.242}, volume = {97}, year = {2007} }

TY - JOUR ID - Edelman_2007_InternetAdvertising L3 - citeulike-article-id:2970391 N2 - We investigate the “generalized second-price” (GSP) auction, a new mechanism used by search engines to sell online advertising. Although GSP looks similar to the Vickrey-Clarke-Groves (VCG) mechanism, its properties are very different. Unlike the VCG mechanism, GSP generally does not have an equilibrium in dominant strategies, and truth-telling is not an equilibrium of GSP. To analyze the properties of GSP, we describe the generalized English auction that corresponds to GSP and show that it has a unique equilibrium. This is an ex post equilibrium, with the same payoffs to all players as the dominant strategy equilibrium of VCG. IS - 1 JF - American Economic Reveiw EP - 259 TI - Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords VL - 97 SP - 242 KW - advertising KW - auctions KW - internet_auctions KW - paper_02_search_engine_competition KW - search_engines KW - vcg AU - Edelman, Benjamin AU - Ostrovsky, Michael AU - Schwarz, Michael PY - 2007/// UR - http://www.atypon-link.com/doi/abs/10.1257/aer.97.1.242 ER -