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Simultaneous Auctions with Synergies

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  • Vijay Krishna
  • Robert Rosenthal

Abstract

Motivated by recent auctions of licenses for the radio frequency spec trum, we consider situations where multiple objects are auctioned simultaneousl y by means of a second-price, sealed-bid auction. For some buyers, called globa l bidders, the value of multiple objects exceeds the sum of the objects' values separately. Others, called local bidders, are interested in only one object. I n a simple independent private values setting, we (a) characterize an equilibri um that is symmetric among the global bidders; (b) show that the addition of bi dders often leads to less aggressive bidding; and (c) compare the revenues obta ined from the simultaneous auction to those from its sequential counterpart.

Suggested Citation

  • Vijay Krishna & Robert Rosenthal, 1995. "Simultaneous Auctions with Synergies," Game Theory and Information 9503004, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpga:9503004
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    References listed on IDEAS

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    1. Eric Maskin & John Riley, 2000. "Asymmetric Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 413-438.
    2. Gale, I.L. & Stegeman, M., 1993. "Sequential Auction of Endogenously Valued Objects," Working papers 9318, Wisconsin Madison - Social Systems.
    3. Gale, Ian, 1990. "A multiple-object auction with superadditive values," Economics Letters, Elsevier, vol. 34(4), pages 323-328, December.
    4. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
    5. Krishna, Kala, 1993. "Auctions with Endogenous Valuations: The Persistence of Monopoly Revisited," American Economic Review, American Economic Association, vol. 83(1), pages 147-160, March.
    6. John McMillan, 1994. "Selling Spectrum Rights," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 145-162, Summer.
    7. Krishna, Vijay & Morgan, John, 1997. "An Analysis of the War of Attrition and the All-Pay Auction," Journal of Economic Theory, Elsevier, vol. 72(2), pages 343-362, February.
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    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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