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He who must not be named

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  • Philippe Février

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Abstract

Landsberger et al. have studied a sealed bid first price auction with two players in which the ranking of the valuations is known. They argue that such a situation can arise in a sequential auction where only the name of the winner is revealed. In this paper we consider sequential auctions where two identical goods are sold sequentially to N players who are interested in both objects. In sealed bid auctions, no information is a priori revealed by the mechanism, but the seller can in principle reveal whatever he wants. We restrict our attention to the case where only the name of the winner is revealed to be in the context of Landsberger et al. for the second auction. The aim of the paper is to compare such a sequential auction with a simultaneous auction where both goods are sold as a bundle or equivalently with a sequential auction where no information is revealed. We first show that there exists an equilibrium of the sequential game in pure and monotone strategies. Then, the comparison of the seller's expected revenue in the two cases allows us to conclude that contrary to Landsberger et al.'s predictions, the seller can not use the information to increase his revenue. This result is obtained using simulations for a large class of distribution functions. The seller must not reveal the name of the winner between the two auctions and instead sell both goods using a simultaneous auction. Copyright Springer-Verlag Berlin/Heidelberg 2003

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File URL: http://hdl.handle.net/10.1007/s10058-003-0094-y
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Bibliographic Info

Article provided by Springer in its journal Review Economic Design.

Volume (Year): 8 (2003)
Issue (Month): 1 (August)
Pages: 99-119

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Handle: RePEc:spr:reecde:v:8:y:2003:i:1:p:99-119

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Related research

Keywords: Sequential auctions; information disclosure;

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Cited by:
  1. Ding, Wei & Jeitschko, Thomas D. & Wolfstetter, Elmar G., 2010. "Signal jamming in a sequential auction," Economics Letters, Elsevier, vol. 108(1), pages 58-61, July.
  2. Yao, Zhiyong & Xiao, Zhiguo, 2013. "A note on sequential auctions with multi-unit demand," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 276-281.

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