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Auction Platform Design and the Linkage Principle

  • Wataru Tamura

    (The University of Tokyo)

Registered author(s):

    This paper examines an auction platform in which the platform provider maximizes profits by adjusting participation fees and by choosing an auction format. The seller has private information on the quality of the good, and each participating buyer receives a private signal about his valuation of the good. The choice of auction format determines the allocation of trading surplus among participating seller and buyers. This paper shows that when the seller’s type is affiliated with buyers’ signals, the platform provider can charge higher participation fees to both sides by choosing a first-price auction rather than a second-price or English auction. It also examines the effect of allowing participating buyers to acquire information on the seller’s type and shows that the provider can charge higher participation fees under a non-transparency policy.

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    File URL: http://www.carf.e.u-tokyo.ac.jp/pdf/workingpaper/fseries/F330.pdf
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    Paper provided by Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo in its series CARF F-Series with number CARF-F-330.

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    Length: 22 pages
    Date of creation: Oct 2013
    Date of revision:
    Handle: RePEc:cfi:fseres:cf330
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    Phone: +81-3-5841-0682
    Web page: http://www.carf.e.u-tokyo.ac.jp/english/
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    1. Bergemann, Dirk & Pesendorfer, Martin, 2001. "Information Structures in Optimal Auctions," CEPR Discussion Papers 2991, C.E.P.R. Discussion Papers.
    2. Patrick Bajari & Ali Horta�su, 2004. "Economic Insights from Internet Auctions," Journal of Economic Literature, American Economic Association, vol. 42(2), pages 457-486, June.
    3. Alexander Matros & Andriy Zapechelnyuk, 2010. "Optimal Mechanisms for an Auction Mediator," Working Papers 670, Queen Mary University of London, School of Economics and Finance.
    4. E. Glen Weyl, 2010. "A Price Theory of Multi-sided Platforms," American Economic Review, American Economic Association, vol. 100(4), pages 1642-72, September.
    5. Marc Rysman, 2009. "The Economics of Two-Sided Markets," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 125-43, Summer.
    6. Alex Gershkov, 2009. "Optimal auctions and information disclosure," Review of Economic Design, Springer, vol. 13(4), pages 335-344, December.
    7. Axel Ockenfels & David Reiley & Abdolkarim Sadrieh, 2006. "Online Auctions," NBER Working Papers 12785, National Bureau of Economic Research, Inc.
    8. Péter Eső & Bal�zs Szentes, 2007. "Optimal Information Disclosure in Auctions and the Handicap Auction," Review of Economic Studies, Oxford University Press, vol. 74(3), pages 705-731.
    9. Gaudeul, Alexandre & Jullien, Bruno, 2005. "E-Commerce, Two-Sided Markets and Info-Mediation," IDEI Working Papers 380, Institut d'Économie Industrielle (IDEI), Toulouse.
    10. Cristián Troncoso Valverde, 2011. "Information Provision in Competing Auctions," Working Papers 25, Facultad de Economía y Empresa, Universidad Diego Portales.
    11. Rochet, Jean-Charles & Tirole, Jean, 2005. "Two-Sided Markets : A Progress Report," IDEI Working Papers 275, Institut d'Économie Industrielle (IDEI), Toulouse.
    12. repec:rje:randje:v:37:y:2006:3:p:668-691 is not listed on IDEAS
    13. repec:rje:randje:v:37:y:2006:3:p:645-667 is not listed on IDEAS
    14. Jullien, B. & Mariotti, T., 2006. "Auction and the informed seller problem," Games and Economic Behavior, Elsevier, vol. 56(2), pages 225-258, August.
    15. Kevin Hasker & Robin Sickles, 2010. "eBay in the Economic Literature: Analysis of an Auction Marketplace," Review of Industrial Organization, Springer, vol. 37(1), pages 3-42, August.
    16. Stephan Lauermann & Gábor Virág, 2012. "Auctions in Markets: Common Outside Options and the Continuation Value Effect," American Economic Journal: Microeconomics, American Economic Association, vol. 4(4), pages 107-30, November.
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