Position Auctions with Consumer Search
Author(s)Athey, Susan; Ellison, Glenn
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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.
DepartmentMassachusetts Institute of Technology. Department of Economics
Quarterly Journal of Economics
Harvard University by the MIT Press
Athey, Susan and Glenn Ellison."Position Auctions with Consumer Search." Quarterly Journal of Economics (2011) 126 (3): 1213-1270.
Author's final manuscript