Bayes-Nash Equilibria in Generalized Second Price Auctions with Allocative Externalities
Working paper
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http://hdl.handle.net/11250/2473314Utgivelsesdato
2016Metadata
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Sammendrag
In this paper, we investigate an incomplete information model of generalized second price auctions
with allocative externalities originating from the heterogeneous match rates of bidders. A novel feature
of our model is that it generates endogenous click-through rates (CTRs). In this setting, we establish
existence of symmetric efficient equilibria for common classes of primitives. This contrasts with the
findings of Gomes and Sweeney (2014), who study a similar model but with fixed CTRs. Moreover, non-existence results require strong assumptions on the primitives of the model. We conclude that existence of equilibria in GSP with incomplete information is quite general.