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Auctions with dynamic populations: Efficiency and revenue maximization

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  • Said, Maher

Abstract

A seller has an uncertain number of perishable goods to sell in each period. Privately informed buyers arrive stochastically to the market. Buyers are risk neutral, patient, and have persistent private values for consuming a single unit. We show that the seller can implement the efficient allocation using a sequence of ascending auctions. The buyers use memoryless strategies to reveal all private information in every period, inducing symmetric behavior across different cohorts. We extend our results to revenue maximization, showing that a sequence of ascending auctions with asynchronous price clocks is an optimal mechanism.

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  • Said, Maher, 2012. "Auctions with dynamic populations: Efficiency and revenue maximization," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2419-2438.
    • Handle: RePEc:eee:jetheo:v:147:y:2012:i:6:p:2419-2438
    DOI: 10.1016/j.jet.2012.05.006
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    More about this item

    Keywords

    Dynamic mechanism design; Indirect mechanisms; Sequential ascending auctions; Sequential allocation; Random arrivals;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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