Keyword Search Advertising and Limited Budgets

نویسنده

  • Woochoel Shin
چکیده

In keyword search advertising, many advertisers operate on a limited budget. Yet how limited budgets affect keyword search advertising has not been extensively studied. This paper offers an analysis of the generalized second-price auction with budget constraints. We find that the budget constraint may induce advertisers to raise their bids to the highest possible amount for two different motivations: to accelerate the elimination of the budget-constrained competitor as well as to reduce their own advertising cost. Thus, in contrast to the current literature, our analysis shows that both budget-constrained and unconstrained advertisers could bid more than their own valuation. We further extend the model to consider dynamic bidding and budget-setting decisions.

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عنوان ژورنال:
  • Marketing Science

دوره 34  شماره 

صفحات  -

تاریخ انتشار 2015