On the Comparative Statics of the Optimal Reserve Price : A Comment on “Reserve price Signaling”
This comment nds an error in Cai, Riley and Ye  in presenceof informational externalities between bidders, the correction of whichgives a broader view on their comparative statics results with respectto n, the number of bidders. A linear specication of the informationalexternalities between bidders is analyzed. In contrast to their claim,the reserve price of the lowest type sellers is shown to be decreasing inn. We establish that the participation threshold is still increasing in nfor high type sellers conrming their main insight. Nevertheless, it isthe opposite comparative statics that holds for the reserve price.
|Date of creation:||2007|
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