Question: Suppose a search engine has two ad slots that it can sell. Slot A has a click through rate of 10 and slot B has

Suppose a search engine has two ad slots that it can sell. Slot A has a click through rate of 10 and slot B has a click through rate of 5. There are three advertisers who are interested in these slots. Advertiser x values clicks at 3 per click, advertiser y values clicks at 2 per click, and advertiser z values clicks at 1 per click.

Compute the socially optimal allocation and the VCG prices for it. Give a brief explanation for your answer?

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