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Google, Yahoo, and other Internet search companies charge advertisers for each click on their ads (which sends the browser to the advertiser’s Web site). Per click advertising fees present an opportunity for “click fraud,” an industry term describing someone (say, a rival firm or a hacker) clicking on a Web search ad with ill intent. If the advertiser can demonstrate that a click was fraudulent, the search company does not bill for that click. A market for click-fraud detectives has developed to fight click fraud. The market demand for the detectives depends on the amount of fraud they can catch, which reduces the firm’s advertising bill. Let denote the per-click fee, n denote the number of clicks per month an advertiser generates, and X be the fraction of clicks that are fraudulent. Let Z represent the fraction of fraudulent clicks that a detective can prove are fraudulent.

 
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