Susan Athey on the Law and Economics of Internet Search

By TAP Staff Blogger

Posted on July 7, 2010


Last month, Susan Athey, Professor of Economics at Harvard University, participated in the Searle Center’s Research Symposium on the Economics and Law of Internet Search at Northwestern University. She was gracious enough to spend a few minutes with TAP to share some of her thoughts on the law and economics of internet search. She discussed why the average person should care about internet search; the relationship between online search advertising and individual privacy; and the economic implications of the search market structure.

The full interview can be viewed below.

Professor Athey’s research focuses on auction theory, the design of auction-based markets, and the statistical analysis of auction data.  One of her recent articles, Skewed Bidding in Pay Per Action Auctions for Online Advertising (with co-authors Nikhil Agarwal and David Yang), looks at problems that might arise with a “pay-per-action” (PPA) online advertising system. This article recommends that to reduce manipulation, platforms like search engines that sell ad space could restrict the allowable actions to one type; or regulate how and when actions are reported. In another one of Professor Athey’s articles, Position Auctions with Consumer Search (with co-author Glenn Ellison), examines how ads shown by search engines like Google affect consumers. This article points out that as long as search engines compete, the system they use to place online ads is likely to lead to consumer benefits.

Professor Athey is an expert in a broad range of economic fields – including industrial organization, econometrics, and microeconomic theory – and has used game theory to examine firm strategy when firms have private information.   She advises governments and businesses on the design of auction-based marketplaces, most recently consulting for Microsoft Corporation on its online advertising auctions.