Auctions with Financial Externalities

Auctions with Externalities

Position Auctions with Externalities

This paper presents models for predicted click-through rates in position auctions that take into account the externalities ads shown in other positions may impose on the probability that an ad in a particular position receives a click. We present a general axiomatic methodology for how click probabilities are affected by the qualities of the ads in the other positions, and illustrate that using...

Sequential auctions and externalities

In many settings agents participate in multiple different auctions that are not necessarily implemented simultaneously. Future opportunities affect strategic considerations of the players in each auction, introducing externalities. Motivated by this consideration, we study a setting of a market of buyers and sellers, where each seller holds one item, bidders have combinatorial valuations and se...

Financial Contracting with Enforcement Externalities

Financial markets crucially rely on the development of an infrastructure dedicated to the enforcement of contracts. Here we study the effects of limited enforcement capacity on financial contracting by proposing a new theory of costly state verification. In our model the principal contracts with a population of entrepreneurs, who borrow to finance risky projects under limited liability. To sust...

Generalized second price auctions with value externalities

We consider a new setting of ad auctions with value externalities. Under such a setting, we perform theoretic analysis on two implementations of generalized second price auctions (GSP): GSPS and GSPV . Our analysis shows that both GSPS and GSPV admit at least one pure Nash equilibrium for the single-slot case, while pure Nash equilibrium may not exist for the multi-slot case. Furthermore, we pr...