Sequential auctions with heterogeneous bidders
AbstractMotivated by empirical findings from jewellery sold at public English auctions at Crédit Municipal de Paris, we study the effect of the presence of two types of bidders on equilibrium strategies and on the price tendency. We consider a second-price auction (sealed-bid og English auction) where bidders are heterogeneous. Some bidders, “professionals”, have multi-unit demand and decreasing marginal utility. Others, “amateurs” are interested in only one object. In an independent private values setting, we characterize an equilibrium when there is one or more professionals and find different price tendencies according to the nature of the demand of amateurs, thus confirming the fact that heterogeneity implies different price matters.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 1998-19.
Length: 19 pages
Date of creation: Oct 1998
Date of revision:
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English auction; sealed-bid auction; multi-unit demand; decreasing marginal utility; heterogeneous bidders;
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- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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