Optimal Auctions with Simultaneous and Costly Participation
AbstractWe study the optimal auction problem with participation costs in the symmetric independent private values setting, where bidders know their valuations when they make independent participation decisions. After characterizing the optimal auction in terms of participation cutoffs, we provide an example where it is asymmetric. We then investigate when the optimal auction will be symmetric/asymmetric and the nature of possible asymmetries. We also show that, under some conditions, the seller obtains her maximal profit in an (asymmetric) equilibrium of an anonymous second price auction. In general, the seller can also use non-anonymous auctions that resemble the ones that are actually observed in practice.
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Bibliographic InfoPaper provided by Vancouver School of Economics in its series Microeconomics.ca working papers with number celik-05-05-09-03-55-40.
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Date of creation: 09 May 2005
Date of revision: 09 Jun 2006
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Other versions of this item:
- Celik Gorkem & Yilankaya Okan, 2009. "Optimal Auctions with Simultaneous and Costly Participation," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-33, July.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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- Leandro Arozamena & Federico Weinschelbaum, 2010.
"On Favoritism in Auctions with Entry,"
103, Universidad de San Andres, Departamento de Economia, revised May 2010.
- Bognar, Katalin & Börgers, Tilman & Meyer-ter-Vehn, Moritz, 2010. "An optimal Voting System when Voting is costly," MPRA Paper 29123, University Library of Munich, Germany.
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