Suppose a search engine has two ad slots that it can sell. Slot A has a click through rate of 10 and slot B has a click through rate of 5. There are three advertisers who are interested in these slots. Advertiser x values clicks at 3 per click, advertiser y values clicks at 2 per click, and advertiser z values clicks at 1 per click. 

Compute the socially optimal allocation and the VCG prices for it. Give a brief explanation for your answer?

Answer rating: 100% (QA)

The socially optimal allocation in this scenario is achieved by assigning each slot to the advertise... View the full answer