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Second best efficiency and the English auction

  • Hernando-Veciana, Ángel
  • Michelucci, Fabio

We study the second best in a single unit sale to two bidders. This is the allocation that maximizes the expected social surplus subject to the biddersʼ incentive compatible constraints when the first best is not implementable. We prove that Maskinʼs (1992) result that any first best allocation that is deterministic and monotone can be implemented with the English auction carries over to the second best.

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File URL: http://www.sciencedirect.com/science/article/pii/S0899825611000716
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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 73 (2011)
Issue (Month): 2 ()
Pages: 496-506

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Handle: RePEc:eee:gamebe:v:73:y:2011:i:2:p:496-506
DOI: 10.1016/j.geb.2011.04.003
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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  12. Krishna, Vijay, 2003. "Asymmetric English auctions," Journal of Economic Theory, Elsevier, vol. 112(2), pages 261-288, October.
  13. Ángel Hernando Veciana & Fabio Michelucci, 2008. "Second Best Efficiency in Auctions," Working Papers. Serie AD 2008-17, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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