Coasian Dynamics in Repeated English Auctions
AbstractWe extend the Coase conjecture to the case of a seller with a single object, who faces n potential buyers and holds a sequence of English auctions until the object is sold. In an independent-private-values environment in which buyers and sellers share the same discount factor, we show that the (perfect Bayesian) equilibrium path of reserve prices obeys a Coasian logic. Moreover, the equilibrium reserve path lies below that for the model of repeated sealed-bid, second-price auctions studied by McAfee and Vincent (1997). Nevertheless, the open (English) and sealed-bid formats are shown to be revenue equivalent.
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Bibliographic InfoPaper provided by School of Economics, University of Queensland, Australia in its series Discussion Papers Series with number 349.
Date of creation: 2007
Date of revision:
Other versions of this item:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-02 (All new papers)
- NEP-GTH-2007-09-02 (Game Theory)
- NEP-MIC-2007-09-02 (Microeconomics)
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- McAfee, R. Preston & Vincent, Daniel, 1997.
"Sequentially Optimal Auctions,"
Games and Economic Behavior,
Elsevier, vol. 18(2), pages 246-276, February.
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