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Series

2021

Cowles Foundation Discussion Papers

Information Design

Articles 1 - 3 of 3

Full-Text Articles in Social and Behavioral Sciences

Selling Impressions: Efficiency Vs. Competition, Dirk Bergemann, Tibor Heumann, Stephen Morris, Constantine Sorokin, Eyal Winter Aug 2021

Selling Impressions: Efficiency Vs. Competition, Dirk Bergemann, Tibor Heumann, Stephen Morris, Constantine Sorokin, Eyal Winter

Cowles Foundation Discussion Papers

In digital advertising, a publisher selling impressions faces a trade-o¤ in deciding how precisely to match advertisers with viewers. A more precise match generates efficiency gains that the publisher can hope to exploit. A coarser match will generate a thicker market and thus more competition. The publisher can control the precision of the match by controlling the amount of information that advertisers have about viewers. We characterize the optimal trade-off when impressions are sold by auction. The publisher pools premium matches for advertisers (when there will be less competition on average) but gives advertisers full information about lower quality matches.


Selling Impressions: Efficiency Vs. Competition, Dirk Bergemann, Tibor Heumann, Stephen Morris Jul 2021

Selling Impressions: Efficiency Vs. Competition, Dirk Bergemann, Tibor Heumann, Stephen Morris

Cowles Foundation Discussion Papers

In digital advertising, a publisher selling impressions faces a trade-off in deciding how precisely to match advertisers with viewers. A more precise match generates efficiency gains that the publisher can hope to exploit. A coarser match will generate a thicker market and thus more competition. The publisher can control the precision of the match by controlling the amount of information that advertisers have about viewers. We characterize the optimal trade-off when impressions are sold by auction. The publisher pools premium matches for advertisers (when there will be less competition on average) but gives advertisers full information about lower quality matches.


Calibrated Click-Through Auctions: An Information Design Approach, Dirk Bergemann, Paul Duetting, Renato Paes Leme, Song Zuo May 2021

Calibrated Click-Through Auctions: An Information Design Approach, Dirk Bergemann, Paul Duetting, Renato Paes Leme, Song Zuo

Cowles Foundation Discussion Papers

We analyze the optimal information design in a click-through auction with fixed valuations per click, but stochastic click-through rates. While the auctioneer takes as given the auction rule of the click-through auction, namely the generalized second-price auction, the auctioneer can design the information flow regarding the click-through rates among the bidders. A natural requirement in this context is to ask for the information structure to be calibrated in the learning sense. With this constraint, the auction needs to rank the ads by a product of the bid and an unbiased estimator of the click-through rates, and the task of designing …