Bidders' Responses to Auction Format Change in Internet Display Advertising Auctions

Understand

We study actual bidding behavior when a new auction format gets introduced into the marketplace.

• More specifically, we investigate this question using a novel dataset on internet display advertising auctions that exploits a staggered adoption by different publishers (sellers) of first-price auctions (FPAs), instead of the traditional second-price auctions (SPAs).
• We analyze the auction format change using difference-in-differences regressions and a synthetic difference-in-differences estimator, which better handles pre-trends.
• The results show that revenue per sold impression (price) jumps considerably for treated publishers relative to control publishers, with increases ranging from 25% to 70% of the pre-treatment price level of the treated group.