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PPA145 - Pay-per-Click Auction Ichiro Obara UCLA Obara(UCLA...

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Pay-per-Click Auction Ichiro Obara UCLA February 15, 2010 Obara (UCLA) Pay-per-Click Auction February 15, 2010 1 / 10
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Pay-per-Click Auction Pay-per-Click Auction Obara (UCLA) Pay-per-Click Auction February 15, 2010 2 / 10
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Pay-per-Click Auction Pay-per-Click Auction M links on a webpage are auctioned. The top link gets the largest number of clicks, then the second top link and so on... Bidders bid how much they would pay per click. The highest bidder wins the top link and pays the second highest bid (per click). The second highest bidder wins the second link and pays the third highest bid... Observe that this is a SPA if M = 1. So Pay-per-Click auction is a generalized second price auction. Obara (UCLA) Pay-per-Click Auction February 15, 2010 3 / 10
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Pay-per-Click Auction Example M = 2 and 3 bidders. The first link generates 100 click/day. The second link generates 60/day. The value of one click is v 1 = $20, v 2 = $10, and v 3 = $5 for bidder 1,2, and 3 respectively.
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