This paper presents a game theoretic analysis of the generalized
second-price auction that the company Overture operated in 2004
to sell sponsored search listings on search engines. We construct a
model that embodies few prior assumptions about parameters, and
we present results that indicate that this model has under quite general
assumptions a multiplicity of Nash equilibria. We then analyze
bid data assuming that advertisers choose Nash equilibrium bids. We
offer preliminary conclusions about advertisers' true willingness to
bid for sponsored search listings. We find that advertisers' true willingness
to bid is multi-dimensional and decreasing in listing position.
Börgers, Tilman, Ingemar Cox, Martin Pesendorfer, and Vaclav Petricek.
"Equilibrium Bids in Sponsored Search Auctions: Theory and Evidence."
American Economic Journal: Microeconomics,
Information and Internet Services; Computer Software