Social and Behavioral Sciences Commons^™

How Social Structure Shapes Female Competition Throughout Her Lifetime, Jeffrey Flory, Kenneth L. Leonard, Magda Tsaneva, Kathryn Vasilaky

Economics

Many studies find a consistent gender gap in competitiveness where men are more likely to compete than women given the same level of ability. Using data from experiments with women ages 12 through 90 in matrilocal and patrilocal communities in rural Malawi, we show that this gender gap does not exist uniformly for all women nor across their whole lifetime. We first replicate three main findings from the gender and competition literature: (i) women are less likely to compete on average; and the gender gap differs by (ii) culture and by (iii) age. In a new finding, we show that …

On The Alignment Of Consumer Surplus And Total Surplus Under Competitive Price Discrimination, Dirk Bergemann, Benjamin Brooks, Stephen Morris

Cowles Foundation Discussion Papers

A number of producers of heterogeneous goods with heterogeneous costs compete in prices. When producers know their own production costs and consumers know their values, consumer surplus and total surplus are aligned: the information structure and equilibrium that maximize consumer surplus also maximize total surplus. We report when alignment extends to the case where either consumers are uncertain about their own values or producers are uncertain about their own costs, and we also give examples showing when it does not. Less information for either producers or consumers may intensify competition in a way that benefits consumers but results in inefficient …

How Do Digital Advertising Auctions Impact Product Prices?, Alessandro Bonatti, Dirk Bergemann, Nicholas Wu

Cowles Foundation Discussion Papers

We ask how the advertising mechanisms of digital platforms impact product prices. We present a model that integrates three fundamental features of digital advertising markets: (i) advertisers can reach customers on and off-platform, (ii) additional data enhances the value of matching advertisers and consumers, and (iii) bidding follows auction-like mechanisms. We compare data-augmented auctions, which leverage the platform’s data advantage to improve match quality, with managed campaign mechanisms, where advertisers’ budgets are transformed into personalized matches and prices through auto-bidding algorithms. In data-augmented second-price auctions, advertisers increase off-platform product prices to boost their competitiveness on-platform. This leads to socially efficient …

How Do Digital Advertising Auctions Impact Product Prices?, Dirk Bergemann, Alessandro Bonatti, Nick Wu

Cowles Foundation Discussion Papers

We ask how the advertising mechanisms of digital platforms impact product prices. We present a model that integrates three fundamental features of digital advertising markets: (i) advertisers can reach customers on and off-platform, (ii) additional data enhances the value of matching advertisers and consumers, and (iii) bidding follows auction-like mechanisms. We compare data-augmented auctions, which leverage the platform’s data advantage to improve match quality, with managed campaign mechanisms, where advertisers’ budgets are transformed into personalized matches and prices through auto-bidding algorithms. In data-augmented second-price auctions, advertisers increase off-platform product prices to boost their competitiveness on-platform. This leads to socially efficient …

Managed Campaigns And Data-Augmented Auctions For Digital Advertising, Dirk Bergemann, Alessandro Bonatti, Nicholas Wu

Cowles Foundation Discussion Papers

We develop an auction model for digital advertising. A monopoly platform has access to data on the value of the match between advertisers and consumers. The platform support bidding with additional information and increase the feasible surplus for on-platform matches. Advertisers jointly determine their pricing strategy both on and off the platform, as well as their bidding for digital advertising on the platform. We compare a data-augmented second-price auction and a managed campaign mechanism. In the data-augmented auction, the bids by the advertisers are informed by the data of the platform regarding the value of the match. This results in …

Data, Competition, And Digital Platforms, Dirk Bergemann, Alessandro Bonatti

Cowles Foundation Discussion Papers

We analyze digital markets where a monopolist platform uses data to match multiproduct sellers with heterogeneous consumers who can purchase both on and o§ the platform. The platform sells targeted ads to sellers that recommend their products to consumers and reveals information to consumers about their values. The revenueoptimal mechanism is a managed advertising campaign that matches products and preferences e¢ ciently. In equilibrium, sellers o§er higher qualities at lower unit prices on than o§ the platform. Privacy-respecting data-governance rules such as organic search results or federated learning can lead to welfare gains for consumers.

Section 5 In Action: Reinvigorating The Ftc Act And The Rule Of Law, Lina M. Khan

Faculty Scholarship

The Federal Trade Commission Act of 1914 didn’t just create a new agency. It created new law for that agency to enforce. The heart of that law is Section 5, which provides that ‘unfair methods of competition in or affecting commerce’ are ‘hereby declared unlawful’. In passing this law, Congress also tasked the FTC with identifying the range of methods of competition that qualify as unfair, since lawmakers recognized they could not specify them all prospectively.

This is a straightforward reading of the statute, and yet it is somewhat controversial. There is a school of thought that considers Section 5’s …