When Does Improved Targeting Increase Revenue?
Venue
Proceedings of the 24th International Conference on the World Wide Web (WWW) (2015), pp. 462-472
Publication Year
2015
Authors
Patrick Hummel, Preston McAfee
BibTeX
Abstract
In second-price auctions with symmetric bidders, we find that improved targeting
via enhanced information disclosure decreases revenue when there are two bidders
and increases revenue if there are at least four bidders. With asymmetries,
improved targeting increases revenue if the most frequent winner wins less than
30.4% of the time, but can decrease revenue otherwise. We derive analogous results
for position auctions. Finally, we show that revenue can vary non-monotonically
with the number of bidders who are able to take advantage of improved targeting.
