MDM Podcast Episode 19 - The economics of advertising auctions with Garrett Johnson
Mobile Dev Memo Podcast
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First Price, First Price or Second Price Auctions?
In a first price auction, the winner s their bid. If they're bidding ten dollars, and that's the highest a bid in the auction, then the're going to be paying ten dollars for the object. A second price auction is a case where the winner pays the next highest bid. Second price refers to the second highest a bidder's bid. So if the highest a a bid was still ten dollars, the winner would not pay ten dollars o pay the next highestbid, which could be five dollars. And so this idea that these auctions are equivalent or turn the amount of money to the seller back into revenue makes sense.
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