The DOJ v Google antitrust trial comes to an end—lasting only three weeks. Before the recap and a detailed dive down into Google’s defense, here’s two fun/exciting news: Prof. Paul Milgrom testifies for Google The DOJ is going to have a hard time. Google certainly knows to get the best person to do the job. According to Tom Blakely from inside the courtroom: As soon as his testimony began, I realized [Prof. Paul Milgrom] would be a formidable witness, not just because of his outstanding intellect and subject matter expertise, but because he is the kind of witness that is simply challenging for a counterparty to deal with. An older gentleman, he was equal parts charming, intelligent, poised, unflagging while enduring hours on the stand, and spoke with the quiet confidence and humility of the wisdom of his years. ...

More popcorn for the ongoing, unprecedented, exciting DOJ v Google trial. During the trial, Google has put forward an illustration to highlight its stance. the spaghetti football—by Google But it seems that (according to people attending to the court) that this approach has backfired. The figure “made it evident that Google is ubiquitous in digital advertising.” Well, as the saying goes, if you can’t dazzle them with brilliance, baffle them with bullshit…

The Department of Justice has been really occupied lately… Official announcement on Sept. 24, 2024: https://www.justice.gov/opa/pr/justice-department-sues-visa-monopolizing-debit-markets: “The Justice Department filed a civil antitrust lawsuit today against Visa for monopolization and other unlawful conduct in debit network markets in violation of Sections 1 and 2 of the Sherman Act” Link to the complaint filing: https://www.justice.gov/opa/media/1370421/dl. The following is a snippet of DOJ’s press release that gives a sense of what is happening: Visa wields its dominance, enormous scale, and centrality to the debit ecosystem to impose a web of exclusionary agreements on merchants and banks. These agreements penalize Visa’s customers who route transactions to a different debit network or alternative payment system. In so doing, the complaint alleges, Visa locks up debit volume, insulates itself from competition, and smothers smaller, lower-priced competitors. ...

In China, doctors tend to get red pennants “JinQi” from their patients, to show appreciation and gratitude. My dad has got a lot of them over his career—I once swung by his office and the doctors store their pennants in buckets… I thought he was well beyond the phase of treating it seriously. But recent days he got another one and posted it everywhere on his social media🤣. Tips of giving out pennant: the bestower should loudly announce their presence and even pretend to be lost so that everyone knows who they’re looking for. ...

The NY Times has an interesting story about fashion: Why Do So Many People Wear All Black? Link. Vanessa Friedman (2024). The discussion begins with a mentioning of a middle school in Texas banning students to wear top-to-bottom black, because the color was more associated with “depression and mental health issues and/or criminality than with happy and healthy kids ready to learn.” The decision [banning all-black attires], not surprisingly, produced such an outcry that it was quickly put on hold to allow for community discussion. And while it does seem somewhat extreme and not entirely realistic, reflecting a very limited understanding of black clothing’s role in the public psyche, it also demonstrates the very real power of wearing all black. More than any other color, it is replete with associations and symbolism, which may mean one thing to a wearer and another to an observer — and which changes depending on the context. ...

Not time to look thoroughly into Google’s issue yet. However, one of Google’s main arguments: With the cost of ads going down and the number of ads sold going up, the market is working. The DOJ’s case risks inefficiencies and higher prices — the last thing that America’s economy or our small businesses need right now. Sounds more like a threat than a proper defense. To me it’s less compelling than DOJ’s 170-page complaints. But I do believe that Google has put forward irreplaceable technologies to have significantly advanced the ad tech industry. But one might live a double life, isn’t it. ...

Here’s your Sunday cuppa tea, or wine if you’d need for today’s juicy content: what has Google done wrong, for real? Today let’s drink the richest blend—how they manipulated their auction mechanism to secure monopoly—according to the DOJ’s filed complaint. Related blogs about DOJ vs. Google: DOJ’s complaints overview, and break down Part I and Part II. before we begin, here’s a quick recap: A quick look at the complete market: The ‘ad-tech stack’, from the left (publishers) selling to the left (advertisers) ...

Music for the weekend: Mozart’s Flute Concerto No. 2 in D major, K. 314. A bit of history lesson: Dutch flautist Ferdinand Dejean (1731–1797) commissioned Mozart for four flute quartets and three flute concerti, of which Mozart only completed three quartets and one new flute concerto (K.313 in G major). Instead of creating a new second concerto, Mozart rearranged the oboe concerto he had written a year earlier as the second flute concerto, although with substantial changes for it to fit with what the composer deemed flute-like. However, Dejean did not pay Mozart for this concerto because it was based on the oboe concerto. ...

I first heard an economist talking about this fascinating concept at Al’s market design coffee. These days I found a student in my coauthor’s former PhD advisor’s group has Erdős number 3—and he’s a first-year PhD. orz. The Erdős number describes the “collaborative distance” between mathematician Paul Erdős and another person, as measured by authorship of mathematical papers. How it has started: Paul Erdős (1913–1996) was an influential Hungarian mathematician who in the latter part of his life spent a great deal of time writing papers with a large number of colleagues—over 500—working on solutions to outstanding mathematical problems. ...

Following up on last week’s introduction to combinatorial auctions and Vickrey-Clarke-Groves (VCG) mechanisms, a natural question arises: Is there a more efficient algorithm to allocate items effectively? One general idea is to start with an arbitrary price vector. If an item is demanded by more than one agent, we increase its price; if no agent demands it, we decrease its price. We then sit back, and pray that the process terminates: ...