Online Ad Auctions: An Experiment

Kevin McLaughlin () and Daniel Friedman
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Kevin McLaughlin: Economic Science Institute, Chapman University

Working Papers from Chapman University, Economic Science Institute

Abstract: A human subject laboratory experiment compares the real-time market performance of the two most popular auction formats for online ad space, Vickrey-ClarkeGroves (VCG) and Generalized Second Price (GSP). Theoretical predictions made in papers by Varian (2007) and Edelman, et al. (2007) seem to organize the data well overall. Efficiency under VCG exceeds that under GSP in nearly all treatments. The difference is economically significant in the more competitive parameter configurations and is statistically significant in most treatments. Revenue capture tends to be similar across auction formats in most treatments.

Keywords: Laboratory Experiments; Auction; Online Auctions; Advertising (search for similar items in EconPapers)
JEL-codes: C92 D44 L11 L81 M3 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Online ad auctions: An experiment (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:16-05

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