Question: We consider ads for a keyword. The search engine oers 2 links. The rst link has a frequency of 100 clicks/day, and the second link

We consider ads for a keyword. The search engine oers 2 links. The rst link has a frequency of 100 clicks/day, and the second link a click frequency of 40 clicks/day. There are 3 bidders, Alice, Bob and Carol. Alice values the click at $10, Bob values the click at $5, and Carol values the click at $1. We run the VCG auction. Find:

1. the outcome of the auction (who gets which position).

2. How much each bidder pays to the search engine per week.

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