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Optimal Mechanisms for an Auction Mediator

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  • Alexander Matros
  • Andriy Zapechelnyuk

Abstract

We consider a multi-period auction with a seller who has a single object for sale, a large population of potential buyers, and a mediator of the trade. The seller and every buyer have independent private values of the object. The mediator designs an auction mechanism which maximizes her revenue subject to certain constraints for the traders. In each period the seller auctions the object to a set of buyers drawn at random from the population. The seller can re-auction the object (infinitely many times) if it is not sold in previous interactions. We characterize the class of mediator-optimal auction mechanisms. One of such mechanisms is a Vickrey auction with a reserve price where the seller pays to the mediator a fixed percentage from the closing price.

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Bibliographic Info

Paper provided by UCLA Department of Economics in its series Levine's Bibliography with number 321307000000000113.

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Date of creation: 20 Jun 2006
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Handle: RePEc:cla:levrem:321307000000000113

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  1. Garratt, Rod & Tröger, Thomas, 2005. "Speculation in Standard Auctions with Resale," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 42, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  2. Rochet, Jean-Charles & Tirole, Jean, 2003. "Platform Competition in Two-Sided Markets," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
  3. Zheng, Charles Zhoucheng, 2002. "Optimal Auction with Resale," Staff General Research Papers 12664, Iowa State University, Department of Economics.
  4. Alexander Matros & Andriy Zapechelnyuk, 2008. "Optimal Fees in Internet Auctions," Discussion Papers 3, Kyiv School of Economics.
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  7. Wilson, Robert B, 1985. "Incentive Efficiency of Double Auctions," Econometrica, Econometric Society, vol. 53(5), pages 1101-15, September.
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  9. McAfee, R. Preston & Vincent, Daniel, 1997. "Sequentially Optimal Auctions," Games and Economic Behavior, Elsevier, vol. 18(2), pages 246-276, February.
  10. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, 09.
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  12. Haile, Philip A., 2000. "Partial Pooling at the Reserve Price in Auctions with Resale Opportunities," Games and Economic Behavior, Elsevier, vol. 33(2), pages 231-248, November.
  13. Philip A. Haile, 2001. "Auctions with Resale Markets: An Application to U.S. Forest Service Timber Sales," American Economic Review, American Economic Association, vol. 91(3), pages 399-427, June.
  14. Reisinger, Markus, 2004. "Two-Sided Markets with Negative Externalities," Discussion Papers in Economics 478, University of Munich, Department of Economics.
  15. Haile,P.A., 1999. "Auctions with resale," Working papers 33, Wisconsin Madison - Social Systems.
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  17. Jullien, Bruno & Mariotti, Thomas, 2002. "Auction and the Informed Seller Problem," IDEI Working Papers 145, Institut d'Économie Industrielle (IDEI), Toulouse, revised Oct 2004.
  18. Marco Pagnozzi, 2004. "Bidding to Lose? Auctions with Resale," CSEF Working Papers 116, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 01 Nov 2006.
  19. Haile, Philip A., 2003. "Auctions with private uncertainty and resale opportunities," Journal of Economic Theory, Elsevier, vol. 108(1), pages 72-110, January.
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Cited by:
  1. Simon Loertscher & Andras Niedermayer, 2008. "Fee Setting Intermediaries: On Real Estate Agents, Stock Brokers, and Auction Houses," Discussion Papers 1472, Northwestern University, Center for Mathematical Studies in Economics and Management Science.

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