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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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    File URL: http://www.sciencedirect.com/science/article/B6V84-51XY01N-1/2/f33ce878e7eb1e9bf6848113d87fc63c
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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

    Related research

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

    References

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    1. Waehrer, Keith & Perry, Martin K, 2003. " The Effects of Mergers in Open-Auction Markets," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 287-304, Summer.
    2. Marshall Robert C. & Meurer Michael J. & Richard Jean-Francois & Stromquist Walter, 1994. "Numerical Analysis of Asymmetric First Price Auctions," Games and Economic Behavior, Elsevier, vol. 7(2), pages 193-220, September.
    3. repec:att:wimass:9702 is not listed on IDEAS
    4. Cantillon, Estelle, 2008. "The effect of bidders' asymmetries on expected revenue in auctions," Games and Economic Behavior, Elsevier, vol. 62(1), pages 1-25, January.
    5. Philip A. Haile, 2001. "Auctions with Resale Markets: An Application to U.S. Forest Service Timber Sales," American Economic Review, American Economic Association, vol. 91(3), pages 399-427, June.
    6. 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, vol. 6(3), pages 461-480.
    7. Leandro Arozamena & Estelle Cantillon, 2004. "Investment Incentives in Procurement Auctions," Review of Economic Studies, Wiley Blackwell, vol. 71(1), pages 1-18, 01.
    8. Todd R. Kaplan & Shmuel Zamir, 2001. "A Note on Revenue Effects of Asymmetry in Private-Value Auctions," Discussion Papers 0110, Exeter University, Department of Economics.
    9. Waehrer, Keith, 1999. "Asymmetric private values auctions with application to joint bidding and mergers," International Journal of Industrial Organization, Elsevier, vol. 17(3), pages 437-452, April.
    10. 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.
    11. 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, vol. 18(3), pages 383-413, April.
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