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Reserve price signaling in first-price auctions with an uncertain number of bidders

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  • Toshihiro Tsuchihashi

    (Daito Bunka University)

Abstract

We study first-price auctions in which the number of bidders is the seller’s private information, and investigate the use of a reserve price to signal this private information. We use the D1 criterion to refine the set of equilibria and characterize a symmetric separating equilibrium outcome, where the reserve price increases with the number of bidders. The key driving force is a certain form of single-crossing property. With more bidders, the seller can afford a high reserve price that discourages competition in the auction, for the winning bid is more likely to be higher.

Suggested Citation

  • Toshihiro Tsuchihashi, 2020. "Reserve price signaling in first-price auctions with an uncertain number of bidders," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(4), pages 1081-1103, December.
    • Handle: RePEc:spr:jogath:v:49:y:2020:i:4:d:10.1007_s00182-020-00731-3
    DOI: 10.1007/s00182-020-00731-3
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    References listed on IDEAS

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    Cited by:

    1. Olivier Bos & Tom Truyts, 2023. "Entry in first-price auctions with signaling," International Journal of Game Theory, Springer;Game Theory Society, vol. 52(2), pages 423-450, June.
    2. Olivier Bos & Tom Truyts, 2023. "Entry in first-price auctions with signaling," International Journal of Game Theory, Springer;Game Theory Society, vol. 52(2), pages 423-450, June.

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