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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. Jullien, B. & Mariotti, T., 2006. "Auction and the informed seller problem," Games and Economic Behavior, Elsevier, vol. 56(2), pages 225-258, August.
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  12. Alexander Matros & Andriy Zapechelnyuk, 2008. "Optimal Fees in Internet Auctions," Discussion Papers 3, Kyiv School of Economics.
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  18. repec:rje:randje:v:37:y:2006:3:p:668-691 is not listed on IDEAS
  19. Gupta, Madhurima & Lebrun, Bernard, 1999. "First price auctions with resale," Economics Letters, Elsevier, vol. 64(2), pages 181-185, August.
  20. Horstmann, Ignatius J & LaCasse, Chantale, 1997. "Secret Reserve Prices in a Bidding Model with a Resale Option," American Economic Review, American Economic Association, vol. 87(4), pages 663-84, September.
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Citations

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Cited by:
  1. 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.
  2. 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.

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