Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/302889 
Year of Publication: 
2024
Series/Report no.: 
cemmap working paper No. CWP16/24
Publisher: 
Centre for Microdata Methods and Practice (cemmap), London
Abstract: 
This paper presents an empirical model of sponsored search auctions where advertisers are ranked by bid and ad quality. Our model is developed under the 'incomplete information' setting with a general quality scoring rule. We establish nonparametric identification of the advertiser's valuation and its distribution given observed bids and introduce novel nonparametric estimators. Using Yahoo! search auction data, we estimate value distributions and study the bidding behavior across product categories. We also conduct counterfactual analysis to evaluate the impact of different quality scoring rules on the auctioneer's revenue. Productspecific scoring rules can enhance auctioneer revenue by at most 24.3% at the expense of advertiser profit (-28.3%) and consumer welfare (-30.2%). The revenuemaximizing scoring rule depends on market competitiveness.
Subjects: 
Online advertising
digital marketing
sponsored search ads
generalized second price auction
incomplete information
nonparametric estimation
score squashing
user targeting
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.