Mechanism Design for AI Overviews: Creator Incentives and Long-Term Profit

The integration of AI Overviews into search engines enhances user experience but diverts traffic from content creators, potentially discouraging high-quality content creation and causing user attrition that undermines long-term search engine profit. To address this issue, we propose a game-theoretic model of creator competition with costly effort, characterize equilibrium behavior, and design two incentive mechanisms: a \emph{citation mechanism} that references sources within an AI Overview, and a \emph{compensation mechanism} that offers monetary rewards to creators. For both cases, we provide structural insights for profit-maximizing mechanisms. Evaluations parameterized by real click data show that although AI Overviews harm long-term search engine profit, interventions based on our proposed mechanisms can increase long-term profit across a range of realistic scenarios, pointing toward a more sustainable trajectory for AI-enhanced search ecosystems.