Coasian Dynamics in Repeated English Auctions
We extend the Coase conjecture to the case of a seller with a single object, who faces n potential buyers and holds a sequence of English auctions until the object is sold. In an independent-private-values environment in which buyers and sellers share the same discount factor, we show that the (perfect Bayesian) equilibrium path of reserve prices obeys a Coasian logic. Moreover, the equilibrium reserve path lies below that for the model of repeated sealed-bid, second-price auctions studied by McAfee and Vincent (1997). Nevertheless, the open (English) and sealed-bid formats are shown to be revenue equivalent.
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- Nancy L. Stokey, 1979. "Intertemporal Price Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 93(3), pages 355-371.
- R. Preston McAfee & Daniel Vincent, 1994.
"Sequentially Optimal Auctions,"
1104, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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- Grant, Simon & Kajii, Atsushi & Menezes, Flavio & Ryan, Matthew, 2003.
"Auctions with Options to Re-auction,"
2003-15, Rice University, Department of Economics.
- Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-149, April.
- John G. Riley & Richard Zeckhauser, 1980. "Optimal Selling Strategies:," UCLA Economics Working Papers 180, UCLA Department of Economics.
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