COWEN: And you’ve published in your academic career some articles that — at least to some people — would count as, I wouldn’t say obscure, but highly theoretical. You have a 1982 econometric piece, “The Nonparametric Approach to Demand Analysis.” Did doing that kind of work also help you at Google?
VARIAN: Believe or not, that very paper was the inspiration for the model I constructed of Google’s ad auction. Because in the equilibrium conditions, basically, I reveal preference conditions that I would rather be in the position I am in and paying the price I’m paying than to be in some other positions. So there’s a little inequality there. You manipulate those inequalities, very much like the paper you describe, and here you get this nice formula for what the price should look like.