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Question 3 ( 2 0 points ) A search engine can sell two ad slots. Slot A has a clickthrough rate of 0 . 0

Question 3(20 points) A search engine can sell two ad slots. Slot A has a clickthrough rate of 0.03 and slot B has a clickthrough rate of 0.04. There are three advertisers who are interested in buying these slots. The value obtained per click is 10 for advertiser X,40 for advertiser Y and 30 for advertiser Z.(a) Suppose that the search engine runs the VCG procedure to allocate slots. What are the slot assignments and the prices paid by the advertisers? Explain. (10 points)(b) The search engine can create a third ad slot, C, with a clickthrough rate of 0.02. What will be the assignment of slots and what prices will the advertisers pay if the search engine creates slot C and again uses the VCG procedure to allocate slots? Do you think the search engine should create slot C?(10 points)

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