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Optimal mechanisms for an auction mediator

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  • Matros, Alexander
  • Zapechelnyuk, Andriy

Abstract

We consider a dynamic auction environment with a long-lived seller and short-lived buyers mediated by a third party. A mediator has incomplete information about traders' values and selects an auction mechanism to maximize her expected revenue. We characterize mediator-optimal mechanisms and show that an optimal mechanism has a simple implementation as a Vickrey auction with a reserve price where the seller pays to the mediator only a fixed percentage from the closing price.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 29 (2011)
Issue (Month): 4 (July)
Pages: 426-431

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Handle: RePEc:eee:indorg:v:29:y:2011:i:4:p:426-431

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Web page: http://www.elsevier.com/locate/inca/505551

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Keywords: Optimal mechanism Vickrey auction Mediator;

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References

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  1. Reisinger, Markus, 2004. "Two-Sided Markets with Negative Externalities," Discussion Papers in Economics 478, University of Munich, Department of Economics.
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Cited by:
  1. Simon Loertscher & Andras Niedermayer, 2008. "Fee Setting Intermediaries: On Real Estate Agents, Stock Brokers, and Auction Houses," Discussion Papers 1472, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. Wataru Tamura, 2013. "Auction Platform Design and the Linkage Principle," CARF F-Series CARF-F-330, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.

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