First-price equilibrium and revenue equivalence in a sequential procurement auction model
AbstractWe analyze first-price equilibrium bidding behavior of capacity-constrained firms in a sequence of two procurement auctions. In the model, firms with a cost advantage in completing the project auctioned off at the end of the sequence may enter the unfavored first auction hoping to lose it. Equilibrium bidding in both auctions deviates from the standard Symmetric Independent Private Value auction model (SIPV) due to opportunity costs of bidding created by possibly employed capacity.For this sequential auction model with non-identical objects, we show that revenue equivalence holds.
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 43 (2010)
Issue (Month): 1 (April)
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Reiss, J. Philipp & Schöndube Jens Robert, 2007. "First-Price Equilibrium and Revenue Equivalence in a Sequential Procurement Auction Model," Research Memorandum 003, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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