A note on reserve price commitments in the Vickrey auction
This note provides a simple explanation why sellers rarely set optimal reserve prices in one-shot auctions. In a standard sealed-bid second-price auction, bidders with private values do not bid truthfully if the seller cannot commit to her announced reserve price. Consequently, expected revenue may be lower than without the announcement of a reserve price.
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- Elmar G. Wolfstetter, 2001.
"The Swiss UMTS Spectrum Auction Flop: Bad Luck or Bad Design,"
CESifo Working Paper Series
534, CESifo Group Munich.
- Wolfstetter, Elmar, 2001. "The Swiss UMTS spectrum auction flop: Bad luck or bad design?," SFB 373 Discussion Papers 2001,50, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Blume, Andreas & Heidhues, Paul, 2004. "All equilibria of the Vickrey auction," Journal of Economic Theory, Elsevier, vol. 114(1), pages 170-177, January.
- Grant, S. & Kajii, A. & Menezes, F. & Ryan, M., 2002. "Auctions with Options to Re-auction," Discussion Paper 2002-55, Tilburg University, Center for Economic Research.
- Grant, Simon & Kajii, Atsushi & Menezes, Flavio & Ryan, Matthew, 2003. "Auctions with Options to Re-auction," Working Papers 2003-15, Rice University, Department of Economics.
- Menezes, Flavio & Ryan, Matthew J., 2005. "Reserve price commitments in auctions," Economics Letters, Elsevier, vol. 87(1), pages 35-39, April. Full references (including those not matched with items on IDEAS)
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