Profit Maximizing in Auctions of Public Goods
Abstract
A profit-maximizing auctioneer can provide a public good to a group of agents. Each group member has a private value for the good being provided to the group. We investigate an auction mechanism where the auctioneer provides the good to the group only if the sum of their bids exceeds a reserve price declared previously by the auctioneer. For the two-bidder case with private values drawn from a uniform distribution we characterize the continuously differentiable symmetric equilibrium bidding functions for the agents, and we find the optimal reserve price for the auctioneer when such functions are used by the bidders. We also examine another interesting family of equilibrium bidding functions for this case, with a discrete number of possible bids, and show the relation (in the limit) to the differentiable bidding functions. Copyright 2001 by Blackwell Publishing Inc.Download Info
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Bibliographic Info
Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.
Volume (Year): 3 (2001)
Issue (Month): 4 ()
Pages: 501-25
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1097-3923
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Related research
Keywords:Other versions of this item:
- Dirk Alboth & Anat Lerner & Jonathan Shalev, 1997. "Profit Maximizing in Auctions of Public Goods," Game Theory and Information 9707010, EconWPA, revised 01 Apr 1998.
- ALBOTH, Dirk & LERNER, Anat & SHALEV, Jonathan, 1998. "Profit maximizing in auctions of public goods," CORE Discussion Papers 1998017, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- C00 - Mathematical and Quantitative Methods - - General - - - General
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Barbieri, Stefano & Malueg, David A., 2010.
"Threshold uncertainty in the private-information subscription game,"
Journal of Public Economics,
Elsevier, vol. 94(11-12), pages 848-861, December.
- Stefano Barbieri & David A. Malueg, 2009. "Threshold Uncertainty in the Private-Information Subscription Game," Working Papers 0903, Tulane University, Department of Economics.
- Zhi Li & Christopher Anderson & Stephen K. Swallow, 2012. "Uniform Price Mechanisms for Threshold Public Goods Provision: An Experimental Investigation," Working Papers 14, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
- Stefano Barbieri & David Malueg, 2008. "Private provision of a discrete public good: efficient equilibria in the private-information contribution game," Economic Theory, Springer, vol. 37(1), pages 51-80, October.
- Jehiel, Philippe & Moldovanu, Benny, 2005.
"Allocative and Informational Externalities in Auctions and Related Mechanisms,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
142, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Philippe Jehiel & Benny Moldovanu, 2005. "Allocative and Informational Externalities in Auctions and Related Mechanisms," Levine's Bibliography 784828000000000490, UCLA Department of Economics.
- Philippe Jehiel & Benny Moldovanu, 2006. "Allocative and Informational Externalities in Auctions and Related Mechanisms," Levine's Bibliography 122247000000001129, UCLA Department of Economics.
- Jehiel, Philippe & Moldovanu, Benny, 2006. "Allocative and Informational Externalities in Auctions and Related Mechanisms," CEPR Discussion Papers 5558, C.E.P.R. Discussion Papers.
- Toth, Sandor F. & Rabotyagov, Sergey S. & Ettl, Gregory J., 2009. "Experimental Testbeds for ECOSEL: A Market Framework for Private Provision of Forest Ecosystem Services," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49565, Agricultural and Applied Economics Association.
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