Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

We consider ads for a keyword. The search engine offers 2 links. The first link has a frequency of 100 clicks/day, and the second

  

We consider ads for a keyword. The search engine offers 2 links. The first link has a frequency of 100 clicks/day, and the second link a click frequency of 40 clicks/day. There are 3 bidders, Alice, Bob and Carol. Alice values the click at $10, Bob values the click at $5, and Carol values the click at $1. We run the VCG auction. 1. Find the outcome of the auction (who gets which position). 2. How much each bidder pays to the search engine per week? 3. Does one of the agents have an incentive to misreport their values? Explain.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Microeconomics An Intuitive Approach with Calculus

Authors: Thomas Nechyba

1st edition

538453257, 978-0538453257

More Books

Students also viewed these Mathematics questions