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Symmetric Auctions

  • Rahul Deb
  • Mallesh Pai

Practical or legal constraints often restrict auctions to being symmetric (anonymous and nondiscriminatory). We examine when this restriction prevents a seller from achieving his objectives. In an independent private value setting with heterogenous buyers, we characterize the set of incentive compatible and individually rational outcomes that can be implemented via a symmetric auction. We show that symmetric auctions can yield many discriminatory outcomes such as revenue maximization and affirmative action. We also characterize the set of implementable outcomes when individual rationality holds ex-post rather than in expectation. This additional requirement may prevent the seller from maximizing revenue.

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Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-486.

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Length: Unknown pages
Date of creation: 13 May 2013
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Handle: RePEc:tor:tecipa:tecipa-486
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  1. Jonathan Levin & Susan Athey, 2007. "Set-Asides and Subsidies in Auctions," 2007 Meeting Papers 571, Society for Economic Dynamics.
  2. Alejandro M. Manelli & Daniel R. Vincent, 2010. "Bayesian and Dominant‐Strategy Implementation in the Independent Private‐Values Model," Econometrica, Econometric Society, vol. 78(6), pages 1905-1938, November.
  3. Jason D. Hartline, 2012. "Approximation in Mechanism Design," American Economic Review, American Economic Association, vol. 102(3), pages 330-36, May.
  4. Mierendorff, Konrad, 2011. "Asymmetric reduced form Auctions," Economics Letters, Elsevier, vol. 110(1), pages 41-44, January.
  5. René Kirkegaard, 2012. "A Mechanism Design Approach to Ranking Asymmetric Auctions," Econometrica, Econometric Society, vol. 80(5), pages 2349-2364, 09.
  6. Estelle Cantillon, 2008. "The effect of bidders' asymmetries on expected revenue in auctions," ULB Institutional Repository 2013/9001, ULB -- Universite Libre de Bruxelles.
  7. Alex Gershkov & Jacob Goeree & Alexey Kushnir & Benny Moldovanu & Xianwen Shi, 2012. "On the Equivalence of Bayesian and Dominant Strategy Implementation," Working Papers tecipa-445, University of Toronto, Department of Economics.
  8. Charles Zhoucheng Zheng, 2002. "Optimal Auction with Resale," Econometrica, Econometric Society, vol. 70(6), pages 2197-2224, November.
  9. Maskin, Eric, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 23-38, January.
  10. Bernard Caillaud & Jacques Robert, 2005. "Implementation of the revenue-maximizing auction by an ignorant seller," Review of Economic Design, Springer, vol. 9(2), pages 127-143, 04.
  11. Mares, Vlad & Swinkels, Jeroen M., 2011. "Near-optimality of second price mechanisms in a class of asymmetric auctions," Games and Economic Behavior, Elsevier, vol. 72(1), pages 218-241, May.
  12. Border, Kim C, 1991. "Implementation of Reduced Form Auctions: A Geometric Approach," Econometrica, Econometric Society, vol. 59(4), pages 1175-87, July.
  13. Corns, Allan & Schotter, Andrew, 1996. "Can Affirmative Action be Cost-Effective? An Experimental Examination of Price-Preference Auctions," Working Papers 96-02, C.V. Starr Center for Applied Economics, New York University.
  14. McAfee, R. Preston & McMillan, John, 1989. "Government procurement and international trade," Journal of International Economics, Elsevier, vol. 26(3-4), pages 291-308, May.
  15. Mallesh Pai & Rakesh Vohra, 2012. "Auction Design with Fairness Concerns: Subsidies vs. Set-Asides," Discussion Papers 1548, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  16. J. Riley & E. Maskin, 1981. "Optimal Auctions with Risk Averse Buyers," Working papers 311, Massachusetts Institute of Technology (MIT), Department of Economics.
  17. Maskin, Eric & Riley, John, 2000. "Asymmetric Auctions," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 413-38, July.
  18. Ian Ayres & Peter Cramton, 1996. "Deficit Reduction Through Diversity: How Affirmative Action at the FCC Increased Auction Competition," Papers of Peter Cramton 96slr, University of Maryland, Department of Economics - Peter Cramton, revised 09 Jun 1998.
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