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On the strategic use of quality scores in keyword auctions: Full extraction of advertisers' surplus

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Author Info
Kiho Yoon () (Department of Economics, Korea University, Seoul, South Korea)

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Abstract

This paper shows that the quality scores in keyword auctions can be strategically chosen to extract all the advertisers' surplus. The reason for the full extraction result is that the quality scores may e¢çectively set all the bidders' valuations equal to the highest valuation, which induces intense bidding competition.

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Publisher Info
Paper provided by Institute of Economic Research, Korea University in its series Discussion Paper Series with number 0904.

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Length: 16 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:iek:wpaper:0904

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Related research
Keywords: Online advertising; Auctions; Quality scores; Full extraction;

Find related papers by JEL classification:
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Benjamin Edelman & Michael Ostrovsky & Michael Schwarz, 2007. "Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords," American Economic Review, American Economic Association, vol. 97(1), pages 242-259, March. [Downloadable!]
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  2. Susan Athey & Glenn Ellison, 2007. "Position Auctions with Consumer Search," Levine's Bibliography 122247000000001633, UCLA Department of Economics. [Downloadable!]
    Other versions:
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This page was last updated on 2009-11-28.

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