Auctions are all over the place; they are even used for advertisements
https://fitsmallbusiness.com/how-much-does-facebook-advertising-cost/
Ever thought how much it costs for companies to advertise on your favorite social media platforms such as Facebook? Better yet, have you ever thought of promoting your brand on social media? Well then, let’s explore how a top company like Facebook charges for advertisements.
The simple answer is $0.65 per click. For instance, if an individual sets his or her budget to $65, then Facebook will reward the person with 100 clicks on his or her ad. Now let’s dive deeper into how Facebook sells ads. According to “How Much Does Facebook Advertising Cost?” Jeremy Marsan explains that the long answer to how much Facebook charges is about $0.16 to $1.00+ per click, depending on the industry you are in, your audience size, and the quality of the ad. To give you guys a better visual, I’ve added Facebook’s advertising cost per industry.
Setting your budget: The Daily Maximum Budget is one way of setting the cost of a Facebook ad. This method of setting the price of a Facebook ad is similar to the First Price Auction. With the daily maximum budget method, an individual sets a daily value, and the ad stops running when the value has been reached.
In class, we discussed auctions types of auctions and dominant strategies for each auction, and Professor Easley mentioned that auctions are in our everyday life even when we do not notice them. We also briefly discussed a problem that we had in our problem set that focused whether we should let eBay automatically bid for us until our value has been reached. More recently, we are talking about ad matching and advertisement slots. Google also charges per click.
As we can see auctions are heavily used in the advertisement. Auctions are a valuable tool for companies because they aid in maximizing profit for internet platforms.