Comparing predicted prices in auctions for online advertising

Eric Bax, Anand Kuratti, Preston McAfee, Julian Romero

Research output: Contribution to journalArticlepeer-review

5 Scopus citations


Online publishers sell opportunities to show ads. Some advertisers pay only if their ad elicits a user response. Publishers estimate response rates for ads in order to estimate expected revenues from showing the ads. Then publishers select ads that maximize estimated expected revenue. By taking a maximum among estimates, publishers inadvertently select ads based on a combination of actual expected revenue and inaccurate estimation of expected revenue. Publishers can increase actual expected revenue by selecting ads to maximize a combination of estimated expected revenue and estimation accuracy.

Original languageEnglish (US)
Pages (from-to)80-88
Number of pages9
JournalInternational Journal of Industrial Organization
Issue number1
StatePublished - Jan 2012
Externally publishedYes


  • Auction
  • Bias
  • Prediction
  • Reversion
  • Validation

ASJC Scopus subject areas

  • Industrial relations
  • Aerospace Engineering
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management
  • Industrial and Manufacturing Engineering


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