Computer Science – Computer Science and Game Theory
Scientific paper
2012-03-29
Computer Science
Computer Science and Game Theory
15 pages, no figures
Scientific paper
We consider an environment where sellers compete over buyers. All sellers are a-priori identical and strategically signal buyers about the product they sell. In a setting motivated by on-line advertising in display ad exchanges, where firms use second price auctions, a firm's strategy is a decision about its signaling scheme for a stream of goods (e.g. user impressions), and a buyer's strategy is a selection among the firms. In this setting, a single seller will typically provide partial information and consequently a product may be allocated inefficiently. Intuitively, competition among sellers may induce sellers to provide more information in order to attract buyers and thus increase efficiency. Surprisingly, we show that such a competition among firms may yield significant loss in consumers' social welfare with respect to the monopolistic setting. Although we also show that in some cases the competitive setting yields gain in social welfare, we provide a tight bound on that gain, which is shown to be small in respect to the above possible loss. Our model is tightly connected with the literature on bundling in auctions.
Polevoy Gleb
Smorodinsky Rann
Tennenholtz Moshe
No associations
LandOfFree
Signalling Competition and Social Welfare (Working Paper) does not yet have a rating. At this time, there are no reviews or comments for this scientific paper.
If you have personal experience with Signalling Competition and Social Welfare (Working Paper), we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and Signalling Competition and Social Welfare (Working Paper) will most certainly appreciate the feedback.
Profile ID: LFWR-SCP-O-58416