Optimal two-object auctions with synergies
AbstractWe design the revenue-maximizing auction for two goods when each buyer has bi-dimensional private information and a superadditive utility function (i.e., a synergy is generated if a buyer wins both goods). In this setting the seller is likely to allocate the goods inefficiently with respect to an environ-ment with no synergies. In particular, if the synergy is large then it may occur that a buyer’s valuations for the goods weakly dominate the valuations of another buyer and the latter one receives the bundle. We link this fact, which contrasts with the results for a setting without synergies, to "non-regular" one-good models.
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Bibliographic InfoPaper provided by ICER - International Centre for Economic Research in its series ICER Working Papers - Applied Mathematics Series with number 18-2001.
Length: 31 pages
Date of creation: Jan 2001
Date of revision:
Multiple-unit Auctions; Multi-dimensional Screening; Bundling;
Other versions of this item:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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