Focused marketing beats costly advertising for optimal auction outcomes.
The article "Simple Economies are Almost Optimal" explores whether a seller should invest in advertising in multiple market segments or focus on one to attract bidders to an auction. The researchers found that a cheaper and focused marketing operation targeting a single market segment can recruit the same number of bidders as a more expensive, broader approach. This suggests that simpler marketing strategies can be almost as effective as more complex ones in attracting bidders to auctions.