Econometrics is a key component to gauging user satisfaction and advertisers' profits. BY DENIS NEKIPELOV AND TAMMY WANG THE TRANSITION OF the largest online advertising platforms to auction-based automated real-time designs has transformed the advertising industry. The advertisers had an opportunity to design flexible goal-specific advertising campaigns, target focused small groups of consumers, and perform fast and efficient experi mentations. At the same time, consumers can be exposed to a

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... aller number of higher quality advertisements. However, in order to achieve the design goals, such as optimal placement of ads that maximizes the sum of utilities of users or revenue generated by the auction platform, the auction needs to be carefully optimized. To optimize the auction, the auctioneer typically chooses a relatively small number of auction parameters that determine the allocation of