Sealed-bid auctions based on Cobb-Douglas utility function
This paper presents a more general independent private value model based on the assumption that Cobb-Douglas utility function is used to make a tradeoff between the probability of winning the unit and the profit under the first-price and second-price sealed-bid auctions. The equilibrium bidding strategies are given and the seller's expected revenue comparisons are made.
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- Eric Maskin & John Riley, 2000. "Asymmetric Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 413-438.
- Che, Yeon-Koo & Gale, Ian, 1996. "Expected revenue of all-pay auctions and first-price sealed-bid auctions with budget constraints," Economics Letters, Elsevier, vol. 50(3), pages 373-379, March.
- McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
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