Game Theory and Auction Design in Online Advertising: Past, Present and Possible Future

09 December 2021

Sponsored listings on search engines and online retailers are one of the most profitable sources of monetization on the Internet, generating hundreds of billions of dollars in annual revenues and supporting much of the web infrastructure. The key feature of sponsored listings, differentiating them from many other forms of advertising, is that they promote items that are directly relevant to a user's current activity, instead of being a distraction. Game theory and auction design have played a critical role in the development of sponsored listings, resulting in an active and productive two-way conversation between academic researchers and industry practitioners. In the lecture, we will briefly discuss the history of sponsored listings, cover their more recent evolution (both in terms of the expansion of the areas of their applicability and in terms of their features and design), and speculate about their potential future evolution.

Michael Ostrovsky
Michael Ostrovsky | Lecturer
The Fred H. Merrill Professor of Economics at the Stanford Graduate School of Business, a Co-Director of the NBER’s Working Group on Market Design and co-founder of Topsort, a venture-backed start-up that provides auction-based infrastructure and advertising solutions for online retailers and marketplaces. His research on advertising auctions has been recognized with the 2013 Prize of the Game Theory Society and the 2018 Test of Time Award of the ACM Special Interest Group on Economics and Computation. In addition to his academic work, he has collaborated with Google, Yahoo, LinkedIn, and Pinterest; advised a number of international telecommunications companies on their bidding strategies in complex auctions for electromagnetic spectrum; and has worked as an expert advisor on legal cases involving online advertising and antitrust-related issues. He received his PhD from Harvard University.
Ruben Enikolopov
Received his PhD in economics from Harvard University. Since 2008 he has been a professor at NES, and since 2013 - a professor at the University of Pompeu Fabra (Spain). One of the leading experts in the field of economic data analysis. The professor's research is published in the top 5 scientific journals in economics according to Scopus.