Consider a standard position auction. There are three positions: Top (T), Middle (M) and Bottom (B). Position T receives rT = 150 clicks per day, position M receives M = 100 and position B receives rB = 50 clicks per day. There are five bidders (B1-B5) with the following dollar values per click: v1 = 12, v2 = 10, v3 = 7, v4 = 5, v5 = 3. %3D %3D %3D (a) Verify whether bidding your value will be an equilibrium of the GSP auction (Google). (b) Find an equilibrium of the GSP auction (Google) with the maximum revenue. (c) Find an equilibrium of the GSP auction (Google) with the minimum revenue. (d) Find the equilibrium of the Vickrey auction (Facebook). Calculate auction revenue.
Consider a standard position auction. There are three positions: Top (T), Middle (M) and Bottom (B). Position T receives rT = 150 clicks per day, position M receives M = 100 and position B receives rB = 50 clicks per day. There are five bidders (B1-B5) with the following dollar values per click: v1 = 12, v2 = 10, v3 = 7, v4 = 5, v5 = 3. %3D %3D %3D (a) Verify whether bidding your value will be an equilibrium of the GSP auction (Google). (b) Find an equilibrium of the GSP auction (Google) with the maximum revenue. (c) Find an equilibrium of the GSP auction (Google) with the minimum revenue. (d) Find the equilibrium of the Vickrey auction (Facebook). Calculate auction revenue.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Q2
GSP vs. Vickrey
Consider a standard position auction. There are three positions: Top (T), Middle (M) and
Bottom (B). Position T receives xT = 150 clicks per day, position M receives M = 100 and
position B receives xB = 50 clicks per day. There are five bidders (B1-B5) with the following
dollar values per click: v1 = 12, v2 = 10, v3 = 7, v4 = 5, v5 = 3.
(a) Verify whether bidding your value will be an equilibrium of the GSP auction (Google).
(b) Find an equilibrium of the GSP auction (Google) with the maximum revenue.
(c) Find an equilibrium of the GSP auction (Google) with the minimum revenue.
(d) Find the equilibrium of the Vickrey auction (Facebook). Calculate auction revenue.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2a892482-b2ec-4850-b902-5c42e2566e8b%2F51d2f32c-5ae5-447d-a9ef-da1bc06cb0bd%2Fsjxfbic_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Q2
GSP vs. Vickrey
Consider a standard position auction. There are three positions: Top (T), Middle (M) and
Bottom (B). Position T receives xT = 150 clicks per day, position M receives M = 100 and
position B receives xB = 50 clicks per day. There are five bidders (B1-B5) with the following
dollar values per click: v1 = 12, v2 = 10, v3 = 7, v4 = 5, v5 = 3.
(a) Verify whether bidding your value will be an equilibrium of the GSP auction (Google).
(b) Find an equilibrium of the GSP auction (Google) with the maximum revenue.
(c) Find an equilibrium of the GSP auction (Google) with the minimum revenue.
(d) Find the equilibrium of the Vickrey auction (Facebook). Calculate auction revenue.
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