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Asymmetric Auctions with Discretely Distributed Valuations

Author

Listed:
  • Ceesay Muhammed

    (Department of Economics and Management, University of Firenze, Via delle Pandette 32, I-50127 Firenze, Italy)

  • Doni Nicola

    (Department of Economics and Management, University of Firenze, Via delle Pandette 32, I-50127 Firenze, Italy)

  • Menicucci Domenico

    (Department of Economics and Management, University of Firenze, Via delle Pandette 32, I-50127 Firenze, Italy)

Abstract

We examine a two-bidder auction setting in which the distributions for the bidders’ valuations are asymmetric over a support consisting of three elements. For the first price auction, for each parameter values we derive the unique Bayes Nash Equilibrium in closed form. We rely on this result to compare the revenue in the first price auction with the revenue in the second price auction. The latter is often revenue superior to the former, and we determine precisely, given a distribution for the value of a bidder, when a distribution for the value of the other bidder exists such that the first price auction is superior to the second price auction.

Suggested Citation

  • Ceesay Muhammed & Doni Nicola & Menicucci Domenico, 2025. "Asymmetric Auctions with Discretely Distributed Valuations," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 25(1), pages 99-118.
    • Handle: RePEc:bpj:bejtec:v:25:y:2025:i:1:p:99-118:n:1007
    DOI: 10.1515/bejte-2024-0109
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    References listed on IDEAS

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    More about this item

    Keywords

    asymmetric auctions; first price auction; second price auction; revenue ranking;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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