Bidding among friends and enemies with symmetric information
We consider an auction setting, in a symmetric information framework, in which bidders, even if they fail to obtain the good, care about the price paid by the winner. We prove that the outcome of the first-price auction is not affected by identity-independent price externalities, while the outcome of the second-price auction is. In contrast, identity-dependent price externalities affect the outcome of both auction formats. In any case, the second-price auction exacerbates the effects of price externalities.
|Date of creation:||2010|
|Date of revision:|
|Publication status:||Published in JITE : Journal of Institutional and Theoretical Economics, 2010, Vol. 166, no. 2. pp. 365-385.Length: 20 pages|
|Contact details of provider:|| Web page: http://www.dauphine.fr/en/welcome.html|
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