Bid coordination in sponsored search auctions: detection methodology and empirical analysis

Francesco Decarolis, Maris Goldmanis, Antonio Penta and Ksenia Shakhgildyan
Additional contact information
Maris Goldmanis: RHUL - Royal Holloway [University of London]
Antonio Penta: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, Barcelona School of Economics, UPF - Universitat Pompeu Fabra [Barcelona]
Ksenia Shakhgildyan: Bocconi University [Milan, Italy]

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Abstract: Bid delegation to specialized intermediaries is common in internet ad auctions. When the same intermediary bids for competing advertisers, its incentive to coordinate client bids might alter the functioning of the auctions. This study develops a methodology to detect bid coordination and presents a strategy to estimate a bound on the search engine revenue losses imposed by bid coordination. When the method is applied to data from auctions held on a major search engine, coordination is detected in 55% of the cases of delegated bidding and the search engine's revenue loss ranges between 5.3% and 10.4%.

Date: 2023-06
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Citations: View citations in EconPapers (1)

Published in Journal of Industrial Economics, 2023, 71 (2), pp.323-353. ⟨10.1111/joie.12331⟩

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Related works:
Journal Article: Bid Coordination in Sponsored Search Auctions: Detection Methodology and Empirical Analysis (2023)
Working Paper: Bid Coordination in Sponsored Search Auctions: Detection Methodology and Empirical Analysis (2023)
Working Paper: Bid Coordination in Sponsored Search Auctions: Detection Methodology and Empirical Analysis (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04198736

DOI: 10.1111/joie.12331

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