Optimal quality scores in sponsored search auctions: Full extraction of advertisers' surplus

Kiho Yoon

No 904, Discussion Paper Series from Institute of Economic Research, Korea University

Abstract: This paper shows that the quality scores in sponsored search auctions can be optimally chosen to extract all the advertisers' surplus. The reason for the full extraction result is that the quality scores may effectively set all the bidders' valuations equal to the highest valuation, which induces intense bidding competition.

Keywords: Online advertising; Sponsored search; Quality score; Full extraction (search for similar items in EconPapers)
JEL-codes: D44 M37 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2009
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http://econ.korea.ac.kr/~ri/WorkingPapers/w0904.pdf (application/pdf)

Related works:
Journal Article: Optimal Quality Scores in Sponsored Search Auctions: Full Extraction of Advertisers' Surplus (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:iek:wpaper:0904

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