Multiple-Object Auctions with Budget Constrained Bidders
AbstractA seller with two objects faces a group of bidders who are subject to budget constraints. The objects have common values to all bidders, but need not be identical and may be either complements or substitutes. In a simple complete information setting we show: (1) if the objects are sold by means of a sequence of open ascending auctions, then it is always optimal to sell the more valuable object first; (2) the sequential auction yields more revenue than the simultaneous ascending auction used recently by the FCC if the discrepancy in the values is large, or if there are significant complementarities; (3) a hybrid simultaneous- sequential form is revenue superior to the sequential auction; and (4) budget constraints arise endogenously.
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Bibliographic InfoPaper provided by EconWPA in its series Game Theory and Information with number 9805001.
Length: 34 pages
Date of creation: 05 May 1998
Date of revision: 26 Jul 1999
Note: Type of Document - SciWord-LaTex; prepared on IBM PC ; to print on HP Laserjet 4; pages: 34; figures: None
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Other versions of this item:
- Benoit, Jean-Pierre & Krishna, Vijay, 2001. "Multiple-Object Auctions with Budget Constrained Bidders," Review of Economic Studies, Wiley Blackwell, vol. 68(1), pages 155-79, January.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-1998-10-02 (All new papers)
- NEP-GTH-1998-10-02 (Game Theory)
- NEP-MIC-1998-10-02 (Microeconomics)
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.:
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