Profit maximizing in auctions of public goods
A profit-maximizing auctioneer can provide a public good to a group of agents. Each group member has a private value for the good being provided to the group. We investigate an auction mechanism where the auctioneer provides the good to the group, only if the sum of their bids exceeds a reserve price declared previously by the auctioneer. For the two-bidder case with private values drawn from a uniform distribution we characterize the continuously differentiable symmetric equilibrium bidding functions for the agents, and find the optimal reserve price for the auctioneer when such functions are used by the bidders. We also examine another interesting family of equilibrium bidding functions for this case, with a discrete number of possible bids, and show the relation (in the limit) to the differentiable bidding functions.
(This abstract was borrowed from another version of this item.)
|Date of creation:|
|Date of revision:|
|Note:||In : Journal of Public Economic Theory, 3(4), 501-525, 2001|
|Contact details of provider:|| Postal: |
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- McAfee, R Preston & McMillan, John, 1992.
American Economic Review,
American Economic Association, vol. 82(3), pages 579-99, June.
- ehiel, Philippe & Benny Moldovanu & Ennio Stacchetti, 1994.
"How (not) to sell nuclear weapons,"
Discussion Paper Serie B
288, University of Bonn, Germany.
- Schneider, Friedrich & Pommerehne, Werner W, 1981. "Free Riding and Collective Action: An Experiment in Public Microeconomics," The Quarterly Journal of Economics, MIT Press, vol. 96(4), pages 689-704, November.
- Cornes, Richard & Sandler, Todd, 1984. "Easy Riders, Joint Production, and Public Goods," Economic Journal, Royal Economic Society, vol. 94(375), pages 580-98, September.
- Paul R. Milgrom, 1985. "Auction Theory," Cowles Foundation Discussion Papers 779, Cowles Foundation for Research in Economics, Yale University.
- Isaac, R. Mark & McCue, Kenneth F. & Plott, Charles R., .
"Public Goods Provision in an Experimental Environment,"
428, California Institute of Technology, Division of the Humanities and Social Sciences.
- Mark Isaac, R. & McCue, Kenneth F. & Plott, Charles R., 1985. "Public goods provision in an experimental environment," Journal of Public Economics, Elsevier, vol. 26(1), pages 51-74, February.
- Jehiel, Phillipe & Moldovanu, Benny, 1997.
"Auctions with Downstream Interaction among Buyers,"
Sonderforschungsbereich 504 Publications
97-06, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Groves, Theodore & Ledyard, John O, 1977.
"Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem,"
Econometric Society, vol. 45(4), pages 783-809, May.
- Theodore Groves & John Ledyard, 1976. "Optimal Allocation of Public Goods: A Solution to the 'Free Rider Problem'," Discussion Papers 144, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Jehiel, Phillipe & Moldovanu, Benny & Stacchetti, E., 1997.
"Multidimensional Mechanism Design for Auctions with Externalities,"
Sonderforschungsbereich 504 Publications
97-04, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Jehiel, Philippe & Moldovanu, Benny & Stacchetti, Ennio, 1999. "Multidimensional Mechanism Design for Auctions with Externalities," Journal of Economic Theory, Elsevier, vol. 85(2), pages 258-293, April.
- George J. Stigler, 1974. "Free Riders and Collective Action: An Appendix to Theories of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 359-365, Autumn.
- Marwell, Gerald & Ames, Ruth E., 1981. "Economists free ride, does anyone else? : Experiments on the provision of public goods, IV," Journal of Public Economics, Elsevier, vol. 15(3), pages 295-310, June.
- R. Isaac & James Walker & Susan Thomas, 1984. "Divergent evidence on free riding: An experimental examination of possible explanations," Public Choice, Springer, vol. 43(2), pages 113-149, January.
- Philippe Jehiel & Benny Moldovanu, 1998. "Auctions with Downstream Interaction," Discussion Papers 1243, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Robert B. Wilson, 1967. "Competitive Bidding with Asymmetric Information," Management Science, INFORMS, vol. 13(11), pages 816-820, July.
- d'Aspremont, C & Cremer, J & Gerard-Varet, L-A, 1997.
"Unique Implementation in Auctions and in Public Goods Problems,"
97a15, Universite Aix-Marseille III.
- d’ASPREMONT, Claude & CREMER, Jacques & GERARD-VARET, Louis-André, 1998. "Unique implementation in auctions and in public goods problems," CORE Discussion Papers 1998010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- d’ASPREMONT, CLaude & CREMER, Jacques & GERARD-VARET, Louis-André, . "Unique implementation in auctions and in public goods problems," CORE Discussion Papers RP -1974, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Lerner, Anat, 1998. "A Pie Allocation Among Sharing Groups," Games and Economic Behavior, Elsevier, vol. 22(2), pages 316-330, February.
- Michael Landsberger & Jacob Rubinstein & Elmar Wolfstetter & Shmuel Zamir, 1999.
"First-Price Auctions when the Ranking of Valuations is Common Knowledge,"
99-18, Centre de Recherche en Economie et Statistique.
- Jacob Rubinstein & Elmar Wolfstetter & Michael Landsberger & Shmuel Zamir, 2001. "First-price auctions when the ranking of valuations is common knowledge," Review of Economic Design, Springer, vol. 6(3), pages 461-480.
- M. Landsberger & J. Rubinstein & E. Wolfstetter & S. Zamir, 1996. "First-Price Auctions when the Ranking of Valuations is Common Knowledge," SFB 373 Discussion Papers 1996,36, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Douglas K. Reece, 1978. "Competitive Bidding for Offshore Petroleum Leases," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 369-384, Autumn.
- McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
- Wilson, Robert, 1977. "A Bidding Model of Perfect Competition," Review of Economic Studies, Wiley Blackwell, vol. 44(3), pages 511-18, October.
- Brubaker, Earl R, 1975. "Free Ride, Free Revelation, or Golden Rule?," Journal of Law and Economics, University of Chicago Press, vol. 18(1), pages 147-61, April.
- Bliss, Christopher & Nalebuff, Barry, 1984. "Dragon-slaying and ballroom dancing: The private supply of a public good," Journal of Public Economics, Elsevier, vol. 25(1-2), pages 1-12, November.
When requesting a correction, please mention this item's handle: RePEc:cor:louvrp:-1596. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alain GILLIS)
If references are entirely missing, you can add them using this form.