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.
|Date of creation:||2007|
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- Drew Fudenberg & David K. Levine & Jean Tirole, 1985. "Infinite-Horizon Models of Bargaining with One-Sided Incomplete Information," Levine's Working Paper Archive 1098, David K. Levine.
- Nancy L. Stokey, 1979. "Intertemporal Price Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 93(3), pages 355-371.
- McAfee, R. Preston & Vincent, Daniel, 1997.
"Sequentially Optimal Auctions,"
Games and Economic Behavior,
Elsevier, vol. 18(2), pages 246-276, February.
- John G. Riley & Richard Zeckhauser, 1980. "Optimal Selling Strategies:," UCLA Economics Working Papers 180, UCLA Department of Economics.
- Grant, S. & Kajii, A. & Menezes, F. & Ryan, M., 2002.
"Auctions with Options to Re-auction,"
2002-55, Tilburg University, Center for Economic Research.
- Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-49, April.
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