• Medientyp: E-Artikel
  • Titel: Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords
  • Beteiligte: Edelman, Benjamin; Ostrovsky, Michael; Schwarz, Michael
  • Erschienen: American Economic Association, 2007
  • Erschienen in: American Economic Review
  • Sprache: Englisch
  • DOI: 10.1257/aer.97.1.242
  • ISSN: 0002-8282
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  • Beschreibung: <jats:p> 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. (JEL D44, L81, M37) </jats:p>