Question: Suppose a search engine has three ad slots that it can sell. Slot a has a clickthrough rate of 6; slot b has a clickthrough

Suppose a search engine has three ad slots that it can sell. Slot a has a clickthrough rate of 6; slot b has a clickthrough rate of 5; and slot c has a clickthrough rate of 1. Three advertisers are interested in these slots. Advertiser x values clicks at 4 per click; advertiser y values them at 2 per click; and advertizer z values clicks at 1 per click. Compute a socially optimal allocation of advertisers to slots and the VCG prices that should be assigned to them. Suppport your answer with a brief explanation or calculation. Suppose a search engine has three ad slots that it can sell. Slot a has a clickthrough rate of 6; slot b has a clickthrough rate of 5; and slot c has a clickthrough rate of 1. Three advertisers are interested in these slots. Advertiser x values clicks at 4 per click; advertiser y values them at 2 per click; and advertizer z values clicks at 1 per click. Compute a socially optimal allocation of advertisers to slots and the VCG prices that should be assigned to them. Suppport your answer with a brief explanation or calculation
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
