Sequential vs. single-round uniform-price auctions
AbstractWe study sequential and single-round uniform-price auctions with affiliated values. We derive symmetric equilibrium for the auction in which k1 objects are sold in the first round and k2 in the second round, with and without revelation of the first-round winning bids. We demonstrate that auctioning objects in sequence generates a lowballing effect that reduces the first-round price. Total revenue is greater in a single-round, uniform auction for k=k1+k2 objects than in a sequential uniform auction with no bid announcement. When the first-round winning bids are announced, we also identify a positive informational effect on the second-round price. Total expected revenue in a sequential uniform auction with winning-bids announcement may be greater or smaller than in a single-round uniform auction, depending on the model's parameters.
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Bibliographic InfoArticle provided by Elsevier in its journal Games and Economic Behavior.
Volume (Year): 62 (2008)
Issue (Month): 2 (March)
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Web page: http://www.elsevier.com/locate/inca/622836
Other versions of this item:
- Claudio Mezzetti & Aleksandar Pekec & Ilia Tsetlin, 2005. "Sequential vs. Single-Round Uniform-Price Auctions," Discussion Papers in Economics 05/26, Department of Economics, University of Leicester, revised Apr 2007.
- Claudio Mezzetti & Aleksandar Pekec & Ilia Tsetlin, 2004. "Sequential vs. Single-Round Uniform-Price Auctions," Working Papers 2004.147, Fondazione Eni Enrico Mattei.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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