Consider a keyword auction setup. The amounts each bidder is willing to pay per click are:

b1: 20/click

b2: 16/click

b3: 10/click

There are 2 positions to be awarded. The click frequency are:

1st position: 400 clicks per week

2nd position: 100 clicks per week

(a) Suppose we run a Generalized English Auction. Calculate what prices each would bidder would drop out.

(b) Suppose we run a Generalized Second Price (GSP) auction. Calculate the outcome and the payments if bidders bid their values.

(c) In GSP, (supposing that other bids bid their values), is there any bidder who would be better off by bidding something other then his/her value?