Pay-Per-Click Advertisements (PPC)
Advertisers specify the words that should trigger their ads and the maximum amount they are willing to pay per click. When a user searches Google’s search engine on www.google.com, ads for relevant words are shown as “sponsored link” on the right side of the screen, and sometimes above the main search results. The ordering of the paid listings depends on other advertisers’ bids (thus the system is classified as P4P) and the historical click-through rates of all ads shown for a given search. The auction mechanism that determines the order of the ads has been called a “generalized second price” auction. It is a variation of the Vickrey Auction auction
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This entry was posted on Friday, July 21st, 2006 at 3:50 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
aloke July 21st, 2006 at 6:41 pm
It is a type of sealed-bid auction, where you submit written bids without knowing the bid of the other people in the auction. The highest bidder wins, but the price paid is the second highest bid. The auction was created by William Vickrey.Its likely similar to an English auction, and gives bidders an incentive to bid their best value.
A good case study : http://www.u.arizona.edu/~dreiley/papers/VickreyHistory.pdf
Am finding more. I think there is a book available ..