We study the bidding strategies of vertically differentiated firms that bid for sponsored search advertisement positions for a keyword at a search engine. We explicitly model how consumers navigate and click on sponsored links based on their knowledge and beliefs about firm qualities. Our model...

We study the bidding strategies of vertically differentiated firms that bid for sponsored search advertisement positions for a keyword at a search engine. We explicitly model how consumers navigate and click on sponsored links based on their knowledge and beliefs about firm qualities. Our model...

The authors study users’ click behavior on organic and sponsored links after a keyword search at a search engine. Using a dataset obtained from a search engine, they analyze over 1.5 million user searches for multiple keywords over the span of one month. They find that consumers’ click...