Practically Implementable Auction for a Good with Countervailing Positive Externalities
AbstractThis study theoretically presents a new auction design called "take-or-give auction." The auction solves the free-rider problem in the case of two symmetric and risk-neutral bidders competing for a good with countervailing positive externalities. The auction makes efficient allocation. Moreover, the extension of the auction by addition some rules maximizes the seller's expected revenue.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 42911.
Date of creation: 29 Nov 2012
Date of revision:
Auction design; positive externalities; countervailing;
Find related papers by JEL classification:
- C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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- Chen, Bo & Potipiti, Tanapong, 2010. "Optimal selling mechanisms with countervailing positive externalities and an application to tradable retaliation in the WTO," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 825-843, September.
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"How (not) to sell nuclear weapons,"
Discussion Paper Serie B
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- Lewis, Tracy R. & Sappington, David E. M., 1989. "Countervailing incentives in agency problems," Journal of Economic Theory, Elsevier, vol. 49(2), pages 294-313, December.
- Bagwell, Kyle & Mavroidis, Petros C. & Staiger, Robert W., 2007. "Auctioning countermeasures in the WTO," Journal of International Economics, Elsevier, vol. 73(2), pages 309-332, November.
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