Impact of Information on Different Parties in the Market of Internet Advertising Auction Under the Mechanism of Generalized Second-Price Auction

This paper investigates the influence of different levels of information provision on advertisement bidders and search engines that own the advertisement places under a generalized second price auction mechanism. Three settings of the level of information are given: no information, incomplete information, and complete information. The study examines specific categories of data collected from the experiment: total profit, individual profit, individual revenue, total revenue for the search engine, and others. With statistical analysis and ANOVA tests, it can be found that increasing the availability of information to consumers would increase their actual payments, thus decreasing their profits and total profits while increasing the total revenue for the search engine. This paper provides a deep understanding of the effects of information on bidders and search engines, giving practical advice to both sides in bidding for advertisement places.