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The Effect of The Reservation Price Increase Policy on Online Advertising Auction A Case Study of The Auctions of Yektant Company

Hosseini Gohar, Mohammad Mahdi | 2023

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 56473 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Rahmati, Mohammad Hossein
  7. Abstract:
  8. Auction is one of the most important and oldest institutions in economics, enabling resource allocation and trade of goods in the economy. Investigating the effects of changes in reservation price in auctions is an important question in auction theory research. In this study, focusing on a policy implemented by Yektanet, which involved altering the reservation price in auctions for advertising slots, we assessed its impact on advertiser costs. The implemented policy led to the activation of two distinct mechanisms, resulting in conflicting effects on the company's revenue. The first mechanism involved an increase in bid and intensified competition for ad placements on average, while the second mechanism led to the exit of advertisers whose valuations for ad placements were below the approved reservation price. This study estimated the overall impact of this policy and separately examined the effects of these two mechanisms. Utilizing a regression discontinuity method, given the two-stage nature of this policy's execution and its communication method for calculation, we obtained meaningful results, and the signs of coefficients in all estimations - overall effect, competition-enhancing mechanism, and exit mechanism - aligned with expectations. This research sheds light on the intricate dynamics of auction policies in the context of online advertising and provides valuable insights into the economic implications of such policies
  9. Keywords:
  10. Auction ; Online Advertising ; Reservation Price ; Regression Discontinuity Design ; Ordinary Least Squares (OLS)Regression ; Yektanet Company

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