Marketing Agencies and Collusive Bidding in Online Ad Auctions

Maris Goldmanis, Francesco Decarolis and Antonio Penta ()

No 1088, Working Papers from Barcelona School of Economics

Abstract: The transition of the advertising market from traditional media to the internet has induced a proliferation of marketing agencies specialized in bidding in the auctions that are used to sell ad space on the web. We analyze how collusive bidding can emerge from bid delegation to a common marketing agency and how this can undermine the revenues and allocative effciency of both the Generalized Second Price auction (GSP, used by Google and Microsoft-Bing and Yahoo!) and the of VCG mechanism (used by Facebook). We nd that, despite its well-known susceptibility to collusion, the VCG mechanism outperforms the GSP auction both in terms of revenues and effciency.

Keywords: Collusion; digital marketing agencies; facebook; Google; GSP; internet auctions; online advertising; VCG (search for similar items in EconPapers)
JEL-codes: C72 D44 L81 (search for similar items in EconPapers)
Date: 2019-04
New Economics Papers: this item is included in nep-com, nep-des, nep-gth, nep-ict, nep-mic and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Marketing Agencies and Collusive Bidding in Online Ad Auctions (2020)
Working Paper: Marketing Agencies and Collusive Bidding in Online Ad Auctions (2019)
Working Paper: Marketing agencies and collusive bidding in online ad auctions (2019)
Working Paper: Marketing Agencies and Collusive Bidding in Online Ad Auctions (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:1088

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