Reserve price when bidders are asymmetric
The authors analyze the optimal reserve price in a second price auction when there are N types of bidders whose valuations are drawn from different distribution functions. The seller cannot determine the specific type of each bidder. First, the authors show that the number of bidders affects the reserve price. Second, they give the sufficient conditions for the uniqueness of the optimal reserve price. Third, the authors find that if a bidder is replaced by a stronger bidder, the optimal reserve price may decrease. Finally, they give sufficient conditions that ensure the seller will not use a reserve price; hence, the auction will be efficient.
|Date of creation:||2013|
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- Lebrun, Bernard, 1999.
"First Price Auctions in the Asymmetric N Bidder Case,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 125-142, February.
- Lebrun, Bernard, 1997. "First Price Auctions in the Asymmetric N Bidder Case," Cahiers de recherche 9715, Université Laval - Département d'économique.
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- Rene Kirkegaard, 2011. "Ranking Asymmetric Auctions using the Dispersive Order," Working Papers 1101, University of Guelph, Department of Economics and Finance.
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- McAfee, R. Preston & Vincent, Daniel, 1997.
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Games and Economic Behavior,
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- Krishnendu Ghosh Dastidar, 2010. "Auctions where incomes are private information and preferences (non quasi-linear) are common knowledge," ISER Discussion Paper 0790, Institute of Social and Economic Research, Osaka University.
- Laffont, Jean-Jacques & Maskin, Eric, 1980. "Optimal reservation price in the Vickery auction," Economics Letters, Elsevier, vol. 6(4), pages 309-313.
- Kirkegaard, René, 2009. "Asymmetric first price auctions," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1617-1635, July.
- Cantillon, Estelle, 2008.
"The effect of bidders' asymmetries on expected revenue in auctions,"
Games and Economic Behavior,
Elsevier, vol. 62(1), pages 1-25, January.
- Estelle Cantillon, 2008. "The effect of bidders' asymmetries on expected revenue in auctions," ULB Institutional Repository 2013/9001, ULB -- Universite Libre de Bruxelles.
- Estelle Cantillon, 2000. "The Effect of Bidders' Asymmetries on Expected Revenue in Auctions," Cowles Foundation Discussion Papers 1279, Cowles Foundation for Research in Economics, Yale University.
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