Reserve Prices in Internet Advertising Auctions: A Field Experiment

Reserve Prices in Internet Advertising Auctions: A Field Experiment

By Michael Ostrovsky, Michael Schwarz
2016Working Paper No. 2054

We present the results of a large field experiment on setting reserve prices in auctions for online advertisements, guided by the theory of optimal auction design suitably adapted to the sponsored search setting. Consistent with the theory, revenues increased substantially after the new reserve prices were introduced.

Keywords
auctions