Arbeitspapier

Nonparametric Estimation of Sponsored Search Auctions and Impacts of AD Quality on Search Revenue

This paper presents an empirical model of sponsored search auctions in which advertisers are ranked by bid and ad quality. We introduce a new nonparametric estimator for the advertiser's ad value and its distribution under the 'incomplete information' assumption. The ad value is characterized by a tractable analytical solution given observed auction parameters. Using Yahoo! search auction data, we estimate value distributions and study the bidding behavior across product categories. We find that advertisers shade their bids more when facing less competition. We also conduct counterfactual analysis to evaluate the impact of score squashing (ad quality raised to power θ < 1) on the auctioneer's revenue. Our results show that product-specific score squashing can enhance auctioneer revenue at the expense of advertiser profit and consumer welfare.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 10312

Klassifikation
Wirtschaft
Econometrics of Games and Auctions
Auctions
Information and Internet Services; Computer Software
Advertising
Thema
sponsored search links
generalized second price auction
incomplete information
nonparametric estimation
bid shading
score quashing

Ereignis
Geistige Schöpfung
(wer)
Kim, Dongwoo
Pal, Pallavi
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2023

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Kim, Dongwoo
  • Pal, Pallavi
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2023

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