This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Ranking Sealed High-Bid and Open Asymmetric Auctions

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Harrison Cheng
Abstract

For an important family of asymmetric auctions, we show that the seller’s expected revenue is higher in the sealed high-bid auction than in the open auction. This is true for any arbitrary numbers of weak and strong buyers. The family has linear equilibrium bidding strategies, and provides a fertile ground for research in asymmetric auctions. We establish many interesting properties of the linear asymmetric auction model. Revenue comparisons for the two auction formats are performed using data observed in U.S. forest timber auctions. By taking realistic parameters fitting the data, and compare the theoretical predictions of the revenues from the two auction formats, we show that the revenue difference is minimal with a fixed number of participants. When the difference in participation is taken into account, the revenue difference predicted by the linear model is quite similar to the empirical results of Athey, Levin and Seira (2004).

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.usc.edu/dept/LAS/economics/IEPR/Working%20Papers/IEPR_05.26_%5BCheng%5D.pdf
File Format: application/pdf
File Function: First version, 2005
Download Restriction: no

Publisher Info
Paper provided by Institute of Economic Policy Research (IEPR) in its series IEPR Working Papers with number 05.26.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 32 pages
Date of creation: May 2005
Date of revision:
Handle: RePEc:scp:wpaper:05-26

Contact details of provider:
Phone: (213) 740-3521
Fax: (213) 740-3522
Web page: http://www.usc.edu/dept/LAS/economics/IEPR/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Farideh Motamedi).

Related research
Keywords:

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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. Graham, Daniel A & Marshall, Robert C, 1987. "Collusive Bidder Behavior at Single-Object Second-Price and English Auctions," Journal of Political Economy, University of Chicago Press, vol. 95(6), pages 1217-39, December. [Downloadable!] (restricted)
  2. Lance Brannman & Luke M. Froeb, 2000. "Mergers, Cartels, Set-Asides, and Bidding Preferences in Asymmetric Oral Auctions," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 283-290, May. [Downloadable!] (restricted)
  3. Hansen, Robert G, 1986. "Sealed-Bid versus Open Auctions: The Evidence," Economic Inquiry, Oxford University Press, vol. 24(1), pages 125-42, January.
  4. Maskin, Eric & Riley, John, 2000. "Asymmetric Auctions," Review of Economic Studies, Blackwell Publishing, vol. 67(3), pages 413-38, July.
  5. Lebrun, Bernard, 1999. "First Price Auctions in the Asymmetric N Bidder Case," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 125-42, February.
  6. Cantillon, Estelle, 2008. "The effect of bidders' asymmetries on expected revenue in auctions," Games and Economic Behavior, Elsevier, vol. 62(1), pages 1-25, January. [Downloadable!] (restricted)
    Other versions:
  7. Susan Athey & Jonathan Levin & Enrique Seira, 2004. "Comparing Open and Sealed Bid Auctions: Theory and Evidence from Timber Auctions," Levine's Bibliography 122247000000000524, UCLA Department of Economics. [Downloadable!]
    Other versions:
  8. Leandro Arozamena & Estelle Cantillon, 2004. "Investment Incentives in Procurement Auctions," Review of Economic Studies, Blackwell Publishing, vol. 71(1), pages 1-18, 01. [Downloadable!] (restricted)
    Other versions:
Full references

Statistics
Access and download statistics

Did you know? Over 1000 institutions contribute their bibliographic data directly to this service.

This page was last updated on 2009-12-9.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.