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Are things only worth what people are willing to pay for them? Tim Harford explains why a method of buying and selling that originated in ancient times has endured to the present day, and is now underpinning the success of some of the internet's most powerful brands.

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10 minutes

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Mon 17 Feb 2020 04:50GMT

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An auctioneer in action at Sotheby's in London (Credit: Tristan Fewings/Getty Images for Sotheby's)


Edward Gibbon The History of the Decline and Fall of the Roman Empire Chapter 31 

Ralph Cassady Auctions and Auctioneering Berkeley: University of California Press 1967 pp33-36

Brian Learmount The History of the Auction London: Barnard and Learmount 1985 p84

Brian Learmount The History of the Auction London: Barnard and Learmount 1985 p84

John McMillan Reinventing the Bazaar: A natural history of markets New York: WW Norton 2002 and “Aalsmeer Flower Auction Fights the Clock” The New York Times Video 23 Dec 2014

William Vickrey, 1961 “Counterspeculation, Auctions and Competitive Sealed Tenders,” Journal of Finance, 16, 8—39.

Paul Klemperer, 2002. "What Really Matters in Auction Design." Journal of Economic Perspectives, 16 (1): 169-189. DOI: 10.1257/0895330027166

Ken Binmore, Paul Klemperer “The Biggest Auction Ever: The Sale of the British 3G Telecom Licences”

The Economic Journal, Volume 112, Issue 478, March 2002, Pages C74–C96,

Google has a video tutorial explaining the workings of the Ad Auction. For a more academic discussion, Google’s Chief Economist Hal Varian published an analysis of the auction as it was in 2009. Hal Varian “Position Auctions” International Journal of Industrial Organization, 2007, vol. 25, issue 6, 1163-1178

Rachel Lerman “Google reports $7.1 billion profit, but still falls short on third-quarter expectations” Associated Press 28 October 2019

Jasmine Enberg  “Global Digital Ad Spending 2019” eMarketer Mar 28, 2019

Jack Nicas “Google Uses Its Search Engine to Hawk Its Products; Google buys millions of its own search ads, competing with customers and promoting its products atop search results” The Wall Street Journal 19 January 2017


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