Auctions and shareholdings
This paper examines how shareholdings affect auctions' revenue and efficiency with independent private values. Two types of shareholdings are analyzed: vertical (resp: horizontal) toeholds cover situations in which bidders own a fraction of the seller's profit (resp: a share of their competitor's profit). Expected revenue is an increasing (resp: decreasing) function of vertical (resp: horizontal) toeholds. With both types of toeholds, auction formats are not revenue equivalent. Expected revenue is affected to a greater extent by the presence of toeholds in the second-price auction than in the first-price auction.
|Date of creation:||2008|
|Date of revision:|
|Publication status:||Published in Annales d'Economie et de Statistique, 2008, no. 90. pp. 233-257.Length: 24 pages|
|Contact details of provider:|| Web page: http://www.dauphine.fr/en/welcome.html|
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