First circulated as Price Coherence and Adverse Intermediation: 'http://ssrn.com/abstract= 2373671 ' http://ssrn.com/abstract= 2373671 in December 2013.Suppose an intermediary provides a benefit to buyers when they purchase from sellers using the intermediary's technology. We develop a model to...

We investigate the "generalized second price" auction (GSP), a new mechanism which is used by search engines to sell online advertising that most Internet users encounter daily. GSP is tailored to its unique environment, and neither the mechanism nor the environment have previously been studied...