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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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    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. Bernhardt, Dan & Scoones, David, 1994. "A Note on Sequential Auctions," American Economic Review, American Economic Association, vol. 84(3), pages 653-57, June.
    2. Thomas D. Jeitschko, 1998. "Learning in Sequential Auctions," Southern Economic Journal, Southern Economic Association, vol. 65(1), pages 98-112, July.
    3. Thomas Kittsteiner & Jorg Nikutta & Eyal Winter, 2004. "Declining Valuations in Sequential Auctions," Discussion Paper Series dp385, The Center for the Study of Rationality, Hebrew University, Jerusalem.
    4. Eric S. Maskin & John G. Riley, 1985. "Auction Theory with Private Values," UCLA Economics Working Papers 359, UCLA Department of Economics.
    5. McAfee R. Preston & Vincent Daniel, 1993. "The Declining Price Anomaly," Journal of Economic Theory, Elsevier, vol. 60(1), pages 191-212, June.
    6. Branco, Fernando, 1997. "Sequential auctions with synergies: An example," Economics Letters, Elsevier, vol. 54(2), pages 159-163, February.
    7. 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.
    8. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer.
    9. 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.
    10. Paul Milgrom & Robert J. Weber, 1981. "A Theory of Auctions and Competitive Bidding," Discussion Papers 447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    11. Jeitschko, Thomas D., 1999. "Equilibrium price paths in sequential auctions with stochastic supply," Economics Letters, Elsevier, vol. 64(1), pages 67-72, July.
    12. Engelbrecht-Wiggans, Richard, 1994. "Sequential auctions of stochastically equivalent objects," Economics Letters, Elsevier, vol. 44(1-2), pages 87-90.
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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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