As auctions are becoming the main mechanism for selling advertisement space on the web, marketing agencies specialized in bidding in online auctions are proliferating. We analyze theoretically how bidding delegation to a common marketing agency can undermine both revenues and efficiency of the...

This paper studies equilibrium selection in the generalized second price auction, employed by major search engines to sell online advertisement positions. We perturb the baseline model by introducing a bidder whose bid and participation are random (noise bidder). In this model, an efficient...

This paper explores how a seller should transmit product information to bidders with horizontally differentiated preferences. Under cheap-talk, we show that, in an informative equilibrium, the seller provides less precise information for more popular product attributes. Second, for any given...

This paper derives the origin of Vickrey's second price auction theory, and explains why some auctioneers adopt such method, while most others do not. This paper also confirms that no second-price can help reveal the true demand

The paper formalizes the intuition that brands are consumed for image reasons and that advertising creates a brand's image. The key idea is that advertising informs the public of brand names and creates the possibility of conspicuous consumption by rendering brands a signalling device. In a...