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Declining prices in sequential auctions with complete revelation of bids

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  • Kannan, Karthik N.
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    Abstract

    In a sequential-auction setting, the expected-winning prices are shown to decline across two stages when all bids are revealed between the stages. The prices decline because bidders desire to hide their private valuation information. The hiding also leads to inefficient allocations.

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    File URL: http://www.sciencedirect.com/science/article/B6V84-4YXK085-1/2/cc315cc03913a3b1bafa6f9ceb8c7d28
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    Bibliographic Info

    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 108 (2010)
    Issue (Month): 1 (July)
    Pages: 49-51

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    Handle: RePEc:eee:ecolet:v:108:y:2010:i:1:p:49-51

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    Web page: http://www.elsevier.com/locate/ecolet

    Related research

    Keywords: Auctions Sequential auctions Declining price anomaly;

    References

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    1. Thomas D. Jeitschko, 1998. "Learning in Sequential Auctions," Southern Economic Journal, Southern Economic Association, vol. 65(1), pages 98-112, July.
    2. Maskin, Eric S & Riley, Joan G, 1985. "Auction Theory with Private Values," American Economic Review, American Economic Association, vol. 75(2), pages 150-55, May.
    3. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
    4. Bernhardt, Dan & Scoones, David, 1993. "A Note on Sequential Auctions," Working Papers 829, California Institute of Technology, Division of the Humanities and Social Sciences.
    5. Val E. Lambson & Norman K Thurston, 2006. "Sequential auctions: theory and evidence from the Seattle Fur Exchange," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 70-80, 03.
    6. Jeitschko, Thomas D., 1999. "Equilibrium price paths in sequential auctions with stochastic supply," Economics Letters, Elsevier, vol. 64(1), pages 67-72, July.
    7. McAfee R. Preston & Vincent Daniel, 1993. "The Declining Price Anomaly," Journal of Economic Theory, Elsevier, vol. 60(1), pages 191-212, June.
    8. Thomas Kittsteiner & Jörg Nikutta & Eyal Winter, 2004. "Declining valuations in sequential auctions," International Journal of Game Theory, Springer, vol. 33(1), pages 89-106, January.
    9. Gerard J. van den Berg & Jan C. van Ours & Menno P. Pradhan, 2001. "The Declining Price Anomaly in Dutch Dutch Rose Auctions," American Economic Review, American Economic Association, vol. 91(4), pages 1055-1062, September.
    10. Branco, Fernando, 1997. "Sequential auctions with synergies: An example," Economics Letters, Elsevier, vol. 54(2), pages 159-163, February.
    11. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer.
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    Cited by:
    1. Katehakis, Michael N. & Puranam, Kartikeya S., 2012. "On bidding for a fixed number of items in a sequence of auctions," European Journal of Operational Research, Elsevier, vol. 222(1), pages 76-84.

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