Selling Impressions: Efficiency vs. Competition

Dirk Bergemann, Tibor Heumann, Stephen Morris, Constantine Sorokin and Eyal Winter (mseyal@pluto.huji.ac.il)
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Constantine Sorokin: Glasgow University and Higher School of Economics

No 2300, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: In digital advertising, a publisher selling impressions faces a trade-off in deciding how precisely to match advertisers with viewers. A more precise match generates efficiency gains that the publisher can hope to exploit. A coarser match will generate a thicker market and thus more competition. The publisher can control the precision of the match by controlling the amount of information that advertisers have about viewers. We characterize the optimal trade-off when impressions are sold by auction. The publisher pools premium matches for advertisers (when there will be less competition on average) but gives advertisers full information about lower quality matches.

Keywords: Second Price Auction; Conflation; Targeted Advertising; Impressions; Two-Sided Private Information; Bayesian Persuasion; Information Design (search for similar items in EconPapers)
JEL-codes: D44 D47 D83 D84 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2021-08
New Economics Papers: this item is included in nep-com, nep-des, nep-gth, nep-isf, nep-mic, nep-ore and nep-reg
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Related works:
Working Paper: Selling Impressions: Efficiency vs. Competition (2021)
Working Paper: Selling Impressions: Efficiency vs. Competition (2021)
Working Paper: Selling Impressions: Efficiency vs. Competition (2021)
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