article

Strategic bidder behavior in sponsored search auctions

Authors:

Benjamin Edelman,

Michael OstrovskyAuthors Info & Claims

Decision Support Systems, Volume 43, Issue 1

Pages 192 - 198

https://doi.org/10.1016/j.dss.2006.08.008

Published: 01 February 2007 Publication History

Abstract

We examine sponsored search auctions run by Overture (now part of Yahoo!) and Google and present evidence of strategic bidder behavior in these auctions. Between June 15, 2002, and June 14, 2003, we estimate that Overture's revenue might have been higher if it had been able to prevent this strategic behavior. We present an alternative mechanism that could reduce the amount of strategizing by bidders, raise search engines' revenues, and increase the efficiency of the market. We conclude by showing that strategic behavior has not disappeared over time; it remains present on both search engines.

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Dütting PFischer FParkes D(2024)Nontruthful Position Auctions Are More Robust to MisspecificationMathematics of Operations Research10.1287/moor.2023.138049:2(901-927)Online publication date: 1-May-2024
https://dl.acm.org/doi/10.1287/moor.2023.1380
Basu SEasley DO’Hara MSirer E(2023)StableFeesManagement Science10.1287/mnsc.2023.473569:11(6508-6524)Online publication date: 31-Mar-2023
https://dl.acm.org/doi/10.1287/mnsc.2023.4735
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Index Terms

Strategic bidder behavior in sponsored search auctions

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Published In

Decision Support Systems Volume 43, Issue 1

February, 2007

301 pages

ISSN:0167-9236

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Elsevier Science Publishers B. V.

Netherlands

Publication History

Published: 01 February 2007

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Dütting PFischer FParkes D(2024)Nontruthful Position Auctions Are More Robust to MisspecificationMathematics of Operations Research10.1287/moor.2023.138049:2(901-927)Online publication date: 1-May-2024
https://dl.acm.org/doi/10.1287/moor.2023.1380
Basu SEasley DO’Hara MSirer E(2023)StableFeesManagement Science10.1287/mnsc.2023.473569:11(6508-6524)Online publication date: 31-Mar-2023
https://dl.acm.org/doi/10.1287/mnsc.2023.4735
Conitzer VKroer CPanigrahi DSchrijvers OStier-Moses NSodomka EWilkens C(2022)Pacing Equilibrium in First Price Auction MarketsManagement Science10.1287/mnsc.2022.431068:12(8515-8535)Online publication date: 1-Dec-2022
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Brustle JDütting PSivan B(2022)Price Manipulability in First-Price AuctionsProceedings of the ACM Web Conference 202210.1145/3485447.3512051(58-67)Online publication date: 25-Apr-2022
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Deng YLahaie SMirrokni VZuo S(2020)A Data-Driven Metric of Incentive CompatibilityProceedings of The Web Conference 202010.1145/3366423.3380249(1796-1806)Online publication date: 20-Apr-2020
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Cited By

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Correcting vindictive bidding behaviors in sponsored search auctions

On Multiple Keyword Sponsored Search Auctions with Budgets

Revenue guarantees in sponsored search auctions

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