Position Auctions with Consumer Search

Susan Athey and Glenn Ellison ()

The Quarterly Journal of Economics, 2011, vol. 126, issue 3, 1213-1270

Abstract: This article examines a model in which advertisers bid for "sponsored-link" positions on a search engine. The value advertisers derive from each position is endogenized as coming from sales to a population of consumers who make rational inferences about firm qualities and search optimally. Consumer search strategies, equilibrium bidding, and the welfare benefits of position auctions are analyzed. Implications for reserve prices and a number of other auction design questions are discussed. Copyright 2011, Oxford University Press.

Date: 2011
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Related works:
Working Paper: Position Auctions with Consumer Search (2009)
Working Paper: Position Auctions with Consumer Search (2007)
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