Benjamin Edelman

Greedy bidding strategies for keyword auctions

How should players bid in keyword auctions such as those used by Google, Yahoo! and MSN?allWe consider greedy bidding strategies for a repeated auction on a single keyword, where in each round, each player chooses some optimal bid for the next round, assuming that the other players merely repeat their previous bid. We study the revenue, convergence and robustness properties of such strategies. Most interesting among these is a strategy we call the balanced bidding strategy (BB): it is known that BB has a unique fixed point with payments identical to those of the VCG mechanism. We show that if all players use the BB strategy and update each round, BB converges when the number of slots is at most 2, but does not always converge for 3 or more slots. On the other hand, we present a simple variant which is guaranteed to converge to the same fixed point for any number of slots. In a model in which only one randomly chosen player updates each round according to the BB strategy, we prove that convergence occurs with probability 1.We complement our theoretical results with empirical studies.

Internet filtering in China

We collected data on the methods, scope, and depth of selective barriers to Internet usage through networks in China. Tests conducted from May through November 2002 indicated at least four distinct and independently operable Internet filtering methods - Web server IP address, DNS server IP address, keyword, and DNS redirection with a quantifiable leap in filtering sophistication beginning in September 2002.

Measuring the perpetrators and funders of typosquatting

We describe a method for identifying “typosquatting”, the intentional registration of misspellings of popular website addresses. We estimate that at least 938 000 typosquatting domains target the top 3 264 .com sites, and we crawl more than 285 000 of these domains to analyze their revenue sources. We find that 80% are supported by pay-per-click ads, often advertising the correctly spelled domain and its competitors. Another 20% include static redirection to other sites. We present an automated technique that uncovered 75 otherwise legitimate websites which benefited from direct links from thousands of misspellings of competing websites. Using regression analysis, we find that websites in categories with higher pay-per-click ad prices face more typosquatting registrations, indicating that ad platforms such as Google AdWords exacerbate typosquatting. However, our investigations also confirm the feasibility of significantly reducing typosquatting. We find that typosquatting is highly concentrated: Of typo domains showing Google ads, 63% use one of five advertising IDs, and some large name servers host typosquatting domains as much as four times as often as the web as a whole.

Earnings and Ratings at Google Answers

I analyze questions and answers from Google Answers. More experienced answerers provide answers with the characteristics askers most value, receiving higher ratings as a result. Answerer earnings increase in experience. Answerers who focus on particular question categories provide answers of higher quality but earn lower pay per hour. Answers provided during the business day receive higher payment per hour, but more experienced answerers tend to favor work at other times.

Efficiencies and Regulatory Shortcuts: How Should We Regulate Companies like Airbnb and Uber?

New software platforms use modern information technology, including full-featured web sites and mobile apps, to allow service providers and consumers to transact with relative ease and increased trust. These platforms provide notable benefits including reducing transaction costs, improving allocation of resources, and information and pricing efficiencies. Yet they also raise questions of regulation, including how regulation should adapt to new services and capabilities, and how to correct market failures that may arise. We explore these challenges and suggest an updated regulatory framework that is sufficiently flexible to allow software platforms to operate and deliver their benefits, while ensuring that service providers, users and third parties are adequately protected from harms that may arise.

Social Comparisons and Deception Across Workplace Hierarchies: Field and Experimental Evidence

We use a unique database of every SSRN paper download over the course of seven years, along with detailed resume data on a random sample of SSRN authors, to examine the role of demographic factors, career concerns, and social comparisons on the commission of a particular type of gaming: the selfdownloading of an author’s own SSRN working paper solely to inflate the paper’s reported download count. We find significant evidence that authors are more likely to inflate their papers’ download counts when a higher count greatly improves the visibility of a paper on the SSRN network. We also find limited evidence of gaming due to demographic factors and career concerns, and strong evidence of gaming driven by social comparisons with various peer groups. These results indicate the importance of including psychological factors in the study of deceptive behavior. * We thank SSRN for providing the data for this study.

Advertising Disclosures: Measuring Labeling Alternatives in Internet Search Engines

In an online experiment, we measure users’ interactions with search engines, both in standard configurations and in modified versions with clearer labels identifying search engine advertisements. In particular, for a random subset of users, we change “Sponsored links” or “Ads” labels to instead read “Paid Advertisements.” Relative to users receiving the “Sponsored link” or “Ad” labels, users receiving the “Paid Advertisement” label click 25% and 27% fewer advertisements, respectively. Users seeing “Paid Advertisement” labels also correctly report that they click fewer advertisements, controlling for the number of advertisements they actually click. Results are most pronounced for commercial searches, and for vulnerable users with low education and little online experience.

Design of Search Engine Services: Channel Interdependence in Search Engine Results

We analyze the incentives for a two-sided intermediary to divert consumers to its favored destinations. Using a quasi-experiment to control for search intent, we identify and measure the impact of a search engine’s exclusive award of preferential placement to its own service. We find that Google’s differential placement of its Flight Search service led to a 65% decrease in click-through rates for non-paid algorithmic links and an 85% increase in click-through rates for paid advertising listings of competing online travel agencies. Moreover, the exclusive integration of search engine services into search results disproportionately impacted traffic to popular sites. JEL classification: L21, L40, L86

Convergence of Position Auctions under Myopic Best-Response Dynamics

We study the dynamics of multiround position auctions, considering both the case of exogenous click-through rates and the case in which click-through rates are determined by an endogenous consumer search process. In both contexts, we demonstrate that dynamic position auctions converge to their associated static, envy-free equilibria. Furthermore, convergence is efficient, and the entry of low-quality advertisers does not slow convergence. Because our approach predominantly relies on assumptions common in the sponsored search literature, our results suggest that dynamic position auctions converge more generally.

Who Owns Metrics

December 2009 JOURNAL OF ADVERTISING RESEARCH 401 onlIne advertIsIng presents remarkable efficiencies—better targeting, improved measurement, and greater return on investment. By dramatically lowering distribution costs, online ads cut fat from placements that had assumed significant waste. Pairing precise measurement with increasingly specific targeting, online ads can show the right message to the right user, with commensurate increases in effectiveness. Furthermore, online formats invite interactivity—not just text, pictures, and videos but evaluation, discussion, and customization. The opportunity is staggering. Yet there are challenges, particularly when networks of intermediaries place ads through convoluted relationships and all the more so when advertising powerhouses dictate unsavory terms. The result is a troubling mess of ads gone wrong— advertisers charged in ways they didn’t fairly agree to and on terms they didn’t meaningfully accept. These problems threaten to destabilize online advertising—wasting advertisers’ budgets, slowing transition to online formats, and reducing payments to online publishers. Online advertising doesn’t have to be a “wild west.” In the sections that follow, I propose five specific rights advertisers should demand as they buy online placements.