ECONOMIC MODELS OF INFORMATION SYSTEMS: INTERNET AUCTIONS AND INFORMATION GATEKEEPERS

In this thesis, we study two important features of themarketplace based internet economy-the emergence of informationgatekeepers and the use of auction-like mechanisms to allocate andprice goods sold on the internet.The first essay ``One Auction or Two? Auction with Multiple-units"discusses the application of sequential sale of multi unitauctions. We analyze the case where both the auctioneer and thebidders are impatient, and find that whether or not to usesequential auctions largely depends on the intensity of marketcompetition. We also explore the problem of whether or not theauctioneer should tell bidders how many items are available forthe auction.The second essay ``Paid Placement in Information Gatekeepers'analyzes the practice of paid placement in informationgatekeepers, where the gatekeeper biases its outputs to favorcertain providers who pay it a placement fee. In addition, to geta better understanding of how different search engines are usingpaid placement strategies, we model in chapter 4 severalpaid-placement ranking strategies and compare their revenues viasimulation.But these are only simulations, which can identify which mechanismis 'better', without finding out which is the ``best'. In thethird essay, ``Optimal Allocation Mechanisms When the Ranking ofBidders Valuations is Common', we study the following problem:buyers (content providers) compete for positions offered by theseller (search engine). While each buyer's valuation for eachposition is private and independent of other's valuation, theranking for these positions is common among all the buyers. Iidentify the optimal mechanisms to allocate the positions underfour different cases, and examine the existence of efficientincentive compatible mechanism (subject to the reserve price).