Internet advertising and the generalized second price auction
Subtitle: selling billions of dollars worth of keywords
By: Benjamin Edelman, Michael Ostrovsky, Michael Schwarz.
Contributors: Ostrovsky, Michael.; Schwarz, Michael, 1970-; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11765; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11765.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Internet advertising.; Internet advertising -- Rates.; Internet auctions.
Description: "We investigate the "generalized second price" auction (GSP), a new mechanism which is used by search engines to sell online advertising that most Internet users encounter daily.  GSP is tailored to its unique environment, and neither the mechanism nor the environment have previously been studied in the mechanism design literature.  Although GSP looks similar to the Vickrey-Clarke-Groves (VCG) mechanism, its properties are very different.  In particular, 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 in a dynamic environment, we describe the generalized English auction that corresponds to the GSP and show that it has a unique equilibrium.  This is an ex post equilibrium that results in the same payoffs to all players as the dominant strategy equilibrium of VCG"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 12/7/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.