Abstract

http://ssrn.com/abstract=772885
 
 

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Designing Online Auctions With Past Performance Information


De Liu


University of Kentucky - Gatton College of Business and Economics

Jianqing Chen


University of Texas at Dallas - Jindal School of Management


Decision Support Systems, Vol. 42, No. 3, pp. 1307-1320, 2006

Abstract:     
We investigate the value of past performance information in the context of keyword advertising auctions, where advertisers differ both in valuation per click and in the numbers of clicks they can generate (their performance). We focus on weighted unit-price-contract (UPC) auctions, in which bidders bid unit prices and pay accordingly if they win, and their bids are weighted by factors based on their own past performance. We characterize the efficient and the revenue-maximizing weighting factors and apply our framework to study Yahoo!'s and Google's auction designs, each of which can be viewed as a special case of weighted UPC auctions.

Keywords: UPC auctions, search engine, Google, keyword advertising, multi-dimensional values

JEL Classification: L86, D45

Accepted Paper Series


Not Available For Download

Date posted: August 16, 2005 ; Last revised: February 15, 2014

Suggested Citation

Liu, De and Chen, Jianqing, Designing Online Auctions With Past Performance Information. Decision Support Systems, Vol. 42, No. 3, pp. 1307-1320, 2006. Available at SSRN: http://ssrn.com/abstract=772885

Contact Information

De Liu (Contact Author)
University of Kentucky - Gatton College of Business and Economics ( email )
Lexington, KY 40506
United States
Jianqing Chen
University of Texas at Dallas - Jindal School of Management ( email )
2601 North Floyd Road
Richardson, TX 75083
United States
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