Declining valuations in sequential auctions
AbstractWe analyze an independent private values model where a number of objects are sold in sequential first- and second-price auctions. Bidders have unit demand and their valuation for an object is decreasing in the rank number of the auction in which it is sold. We derive efficient equilibria if prices are announced after each auction or if no information is given to bidders. We show that the sequence of prices constitutes a supermartingale. Even if we correct for the decrease in valuations for objects sold in later auctions we find that average prices are declining. Copyright Springer-Verlag 2004
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Bibliographic InfoArticle provided by Springer in its journal International Journal of Games Theory.
Volume (Year): 33 (2004)
Issue (Month): 1 (January)
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Web page: http://link.springer.de/link/service/journals/00182/index.htm
Other versions of this item:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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- Paul Schweinzer, 2008. "Labour market recruiting with intermediaries," Review of Economic Design, Springer, vol. 12(2), pages 119-127, June.
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