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Asymmetric Multiple-Object First-Price Auctions

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Author Info

  • Paul Pezanis-Christou

    ()
    (School of Economics, University of Adelaide)

Abstract

The paper reports on the effects of one-sided imperfect information on bidding behaviour in simultaneous and sequential first-price auctions of non-identical objects when bidders have multi-unit demands. The analysis provides the following four main results. First, when different objects are to be sold in sequence, the seller maximises her expected revenues by selling the most valuable object first. Second, the more the objects are different and the more the sequential format favours the informed bidder. Third, by switching the order of sales, the seller may want to change her initial preference for a simultaneous format (in which bidders submit object-specific bids) to one for a sequential format. Fourth, sequential auctions are mostly preferred by the seller when the objects are likely to be of low value and the precision of the informed bidder's signal is low.

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File URL: http://www.economics.adelaide.edu.au/research/papers/doc/wp2013-07.pdf
File Function: First version, 2013
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Bibliographic Info

Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2013-07.

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Length: 25 pages
Date of creation: May 2013
Date of revision:
Handle: RePEc:adl:wpaper:2013-07

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Web page: http://www.economics.adelaide.edu.au/
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Related research

Keywords: multiple-object auctions; sequential and simultaneous procedures; first-price auctions; asymmetric bidders; multi-unit demands; common value; price trends; order of sales.;

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References

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  1. Pitchik, Carolyn, 2009. "Budget-constrained sequential auctions with incomplete information," Games and Economic Behavior, Elsevier, vol. 66(2), pages 928-949, July.
  2. Wedad Elmaghraby, 2003. "The Importance of Ordering in Sequential Auctions," Management Science, INFORMS, vol. 49(5), pages 673-682, May.
  3. Vijay Krishna & Robert Rosenthal, 1995. "Simultaneous Auctions with Synergies," Game Theory and Information 9503004, EconWPA.
  4. Claudio Mezzetti & Aleksandar Pekec & Ilia Tsetlin, 2005. "Sequential vs. Single-Round Uniform-Price Auctions," Discussion Papers in Economics 05/26, Department of Economics, University of Leicester, revised Apr 2007.
  5. Bernhardt, Dan & Scoones, David, 1993. "A Note on Sequential Auctions," Working Papers 829, California Institute of Technology, Division of the Humanities and Social Sciences.
  6. Robert W. Rosenthal & Ruqu Wang, 1995. "Simultaneous Auctions with Synergies and Common Values," Papers 0060, Boston University - Industry Studies Programme.
  7. Donald B. Hausch, 1986. "Multi-Object Auctions: Sequential vs. Simultaneous Sales," Management Science, INFORMS, vol. 32(12), pages 1599-1610, December.
  8. Archishman Chakraborty & Nandini Gupta & Rick Harbaugh, 2006. "Best foot forward or best for last in a sequential auction?," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 176-194, 03.
  9. Benoit, Jean-Pierre & Krishna, Vijay, 2001. "Multiple-Object Auctions with Budget Constrained Bidders," Review of Economic Studies, Wiley Blackwell, vol. 68(1), pages 155-79, January.
  10. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer.
  11. Paul Milgrom & Robert J. Weber, 1981. "The Value of Information in a Sealed-Bid Auction," Discussion Papers 462, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  12. Johannes H�rner & Julian Jamison, 2008. "Sequential Common-Value Auctions with Asymmetrically Informed Bidders," Review of Economic Studies, Oxford University Press, vol. 75(2), pages 475-498.
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