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Optimal Quality Scores in Sponsored Search Auctions: Full Extraction of Advertisers' Surplus
- Authors
- Yoon, Kiho
- Issue Date
- 2010
- Publisher
- BERKELEY ELECTRONIC PRESS
- Keywords
- online advertising; sponsored search; quality score; full extraction
- Citation
- B E JOURNAL OF THEORETICAL ECONOMICS, v.10, no.1
- Indexed
- SSCI
AHCI
SCOPUS
- Journal Title
- B E JOURNAL OF THEORETICAL ECONOMICS
- Volume
- 10
- Number
- 1
- ISSN
- 1935-1704
- 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.
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