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Budget-Constrained Sequential Auctions with Incomplete Information

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Author Info
Carolyn Pitchik

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Abstract

I study a budget-constrained, private-valuation, sealed-bid sequential auction with two incompletely-informed, risk-neutral bidders in which the valuations and income may be non-monotonic functions of a bidder's type. Multiple equilibrium symmetric bidding functions may exist that differ in allocation, efficiency and revenue. The sequence of sale affects the competition for a good and therefore also affects revenue and the prices of each good in a systematic way that depends on the relationship among the valuations and incomes of bidders. The sequence of sale may affect prices and revenue even when the number of bidders is large relative to the number of goods. If a particular good, say α, is allocated to a strong bidder independent of the sequence of sale, then auction revenue and the price of good α are higher when good α is sold first.

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Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-342.

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Length: 38 pages
Date of creation: 22 Oct 2008
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Handle: RePEc:tor:tecipa:tecipa-342

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Related research
Keywords: sequential auctions; budget constraints; efficiency; revenue; price; sequence;

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Find related papers by JEL classification:
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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References listed on IDEAS
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  38. Carolyn Pitchik, 1989. "Budget-Constrained Sequential Auctions With Incomplete Information," STICERD - Theoretical Economics Paper Series 201, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
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Full references

Cited by:
(explanations, 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. Kala Krishna, 1990. "Auctions with Endogenous Valuations, The Snowball Effect Revisited," NBER Working Papers 3483, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Masili, Gustavo, 2006. "Auction with aftermarket for budget constrained bidders," MPRA Paper 2134, University Library of Munich, Germany. [Downloadable!]
  3. Carolyn Pitchik, 2008. "Budget-Constrained Sequential Auctions with Incomplete Information," Working Papers tecipa-342, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
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