TY  - JOUR
AU  - Athey,Susan
AU  - Ellison,Glenn
TI  - Position Auctions with Consumer Search
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15253
PY  - 2009
Y2  - August 2009
UR  - http://www.nber.org/papers/w15253
L1  - http://www.nber.org/papers/w15253.pdf
N1  - Author contact info:
Susan Athey
Department of Economics
Harvard University
1875 Cambridge St.
Cambridge, MA 02138
Tel: 650/725-8696
Fax: 650/725-5702
E-Mail: athey@fas.harvard.edu

Glenn Ellison
Department of Economics
Massachusetts Institute of Technology
50 Memorial Drive, E52-380A
Cambridge, MA 02142-1347
Tel: 617/253-8702
Fax: 617/253-1330
E-Mail: gellison@mit.edu
AB  - This paper examines a model in which advertisers bid for "sponsored-link" positions on a search engine. The value advertisers derive from each position is endogenized as coming from sales to a population of consumers who make rational inferences about firm qualities and search optimally. Consumer search strategies, equilibrium bidding, and the welfare benefits of position auctions are analyzed. Implications for reserve prices and a number of other auction design questions are discussed.
ER  -