Today we covered a little bit of historical perspective about them and next class we'll get into the theory. We'll start with the basics of auction theory and then move to the special case of ad auctions and ad exchanges (where we'll do a little in class experiment to give you a feel for the problem).

Note --

**we will be having a make-up lecture on Friday 2/25 (this friday)**at 1-2:30 in Ann 213. Please be sure to attend since we'll be covering important material.

Also,

**we will be having only 1 office hours this week**(since the HW is not due until next friday). Raga will be covering office hours Thursday 7-9. Please stop by if you have questions about the ad auction competition or about the theory part of HW6.

On lecture 8 around page 22 - you have the example of marginal cost pricing and then applying it. When I apply the formula on each of the edges - I find that the variable cost edges are x/50 - 1/100 rather than just the x/50 that you have. Did I do something wrong or is it a 'typo' in the notes?

ReplyDelete@giordon: There is a typo in the notes, but I don't think it matches what you're pointing out.

ReplyDeleteMarginal cost pricing gives:

c_e(x) + (x-1)(c_e(x)- c_e(x-1))

= x/100 + (x-1)(x/100 - (x-1)/100)

= x/100 + (x-1)(1/100)

= (2x-1)/100