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Hal R. Varian - The Economics of Internet Search

This lecture provides an introduction to the economics of Internet search engines. After a brief review of the historical development of the technology and the industry, Varian describes some of the economic features of the auction system used for displaying ads. It turns out that some relatively simple economic models provide significant insight into the operation of these auctions. In particular, the classical theory of two-sided matching markets turns out to be very useful in this context. Hal R. Varian, Chief Economist at Google, started in May 2002 as a consultant and has been involved in many aspects of the company, including auction design, econometric, finance, corporate strategy and public policy. The last seminar in this year's Calit2-sponsored series, "Behavioral, Social, and Computer Sciences Seminar Series," was Friday, May 23, 2008. This series promotes the development of theory and experiments that apply the computational world view to the theories and methodologies of the social and behavioral sciences.

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