Second Best Efficiency in Auctions
AbstractWe characterize the incentive compatible allocation that maximizes the expected social surplus in a single-unit sale when the efficient allocation is not implementable. This allocation may involve no selling when it is efficient to sell. We then show that the English auction always implements the second best allocation when there are only two bidders, but not with more than two. Our model employs a unidimensional type space with independent types and allocative externalities, but captures some features of models with multidimensional types.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2008-17.
Length: 40 pages
Date of creation: Dec 2008
Date of revision:
Publication status: Published by Ivie
Efficiency; auctions; mechanism design;
Other versions of this item:
- Hernando-Veciana, Ángel & Michelucci, Fabio, . "Second Best Efficiency in Auctions," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5184, Universidad Carlos III de Madrid.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-03 (All new papers)
- NEP-CTA-2009-01-03 (Contract Theory & Applications)
- NEP-GTH-2009-01-03 (Game Theory)
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- Charles A. Holt & William Shobe & Dallas Burtraw & Karen Palmer & Jacob K. Goeree, 2007. "Auction Design for Selling CO2 Emission Allowances Under the Regional Greenhouse Gas Initiative," Reports 2007-03, Center for Economic and Policy Studies.
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