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Asymmetry and revenue in first-price auctions

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  • Cheng, Harrison
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    Abstract

    We show by an example that in first-price IPV auctions, asymmetry in bidders' valuations need not reduce the revenue compared to a benchmark symmetric model with the same amount of social surplus. Asymmetry need not reduce competition in first-price auctions.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 111 (2011)
    Issue (Month): 1 (April)
    Pages: 78-80

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    Handle: RePEc:eee:ecolet:v:111:y:2011:i:1:p:78-80

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

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    Keywords: Asymmetry Revenue effect First-price auctions Private value;

    References

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    1. Estelle Cantillon, 2008. "The effect of bidders' asymmetries on expected revenue in auctions," ULB Institutional Repository 2013/9001, ULB -- Universite Libre de Bruxelles.
    2. Philip A. Haile, 2001. "Auctions with Resale Markets: An Application to U.S. Forest Service Timber Sales," American Economic Review, American Economic Association, American Economic Association, vol. 91(3), pages 399-427, June.
    3. Todd R. Kaplan & Shmuel Zamir, 2002. "A Note on Revenue Effects of Asymmetry in Private-Value Auctions," Discussion Paper Series, The Center for the Study of Rationality, Hebrew University, Jerusalem dp291, The Center for the Study of Rationality, Hebrew University, Jerusalem.
    4. Waehrer, Keith, 1999. "Asymmetric private values auctions with application to joint bidding and mergers," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 17(3), pages 437-452, April.
    5. Jacob Rubinstein & Elmar Wolfstetter & Michael Landsberger & Shmuel Zamir, 2001. "First-price auctions when the ranking of valuations is common knowledge," Review of Economic Design, Springer, Springer, vol. 6(3), pages 461-480.
    6. Marshall Robert C. & Meurer Michael J. & Richard Jean-Francois & Stromquist Walter, 1994. "Numerical Analysis of Asymmetric First Price Auctions," Games and Economic Behavior, Elsevier, Elsevier, vol. 7(2), pages 193-220, September.
    7. Eric S. Maskin & John G. Riley, 1985. "Auction Theory with Private Values," UCLA Economics Working Papers, UCLA Department of Economics 359, UCLA Department of Economics.
    8. Leandro Arozamena & Estelle Cantillon, 2000. "Investment Incentives in Procurement Auctions," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1276, Cowles Foundation for Research in Economics, Yale University.
    9. Bernard Lebrun, 2002. "Continuity of the first price auction Nash equilibrium correspondence," Economic Theory, Springer, Springer, vol. 20(3), pages 435-453.
    10. Dalkir, Serdar & Logan, John W. & Masson, Robert T., 2000. "Mergers in symmetric and asymmetric noncooperative auction markets: the effects on prices and efficiency," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 18(3), pages 383-413, April.
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    Cited by:
    1. Arieh Gavious & Yizhaq Minchuk, 2014. "Ranking asymmetric auctions," International Journal of Game Theory, Springer, Springer, vol. 43(2), pages 369-393, May.

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