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Optimal Dynamic Auctions

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Author Info
Mallesh Pai
Rakesh Vohra
Abstract

We consider a dynamic auction problem motivated by the traditional single-leg, multi-period revenue management problem. A seller with C units to sell faces potential buyers with unit demand who arrive and depart over the course of T time periods. The time at which a buyer arrives, her value for a unit as well as the time by which she must make the purchase are private information. In this environment, we derive the revenue maximizing Bayesian incentive compatible selling mechanism.

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File URL: http://www.kellogg.northwestern.edu/research/math/papers/1461.pdf
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Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 1461.

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Date of creation: Mar 2008
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Handle: RePEc:nwu:cmsems:1461

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Related research
Keywords: dynamic mechanism design optimal auctions virtual valuation revelation principle

Find related papers by JEL classification:
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Armstrong, Mark, 1996. "Multiproduct Nonlinear Pricing," Econometrica, Econometric Society, vol. 64(1), pages 51-75, January. [Downloadable!] (restricted)
  2. Border, Kim C, 1991. "Implementation of Reduced Form Auctions: A Geometric Approach," Econometrica, Econometric Society, vol. 59(4), pages 1175-87, July. [Downloadable!] (restricted)
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This page was last updated on 2008-7-29.


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