Coasian Dynamics in Repeated English Auctions

Menezes, Flavio M. and Ryan, Matthew J. (2007). Coasian Dynamics in Repeated English Auctions. Discussion Paper No. 349, School of Economics, The University of Queensland.

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Author Menezes, Flavio M.
Ryan, Matthew J.
Title Coasian Dynamics in Repeated English Auctions
School, Department or Centre School of Economics
Institution The University of Queensland
Series Discussion Paper
Report Number No. 349
Publication date 2007-08
Language eng
Subject 340203 Finance Economics
Abstract/Summary 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.
Keyword dynamic auctions
Coase conjecture
reserve prices
Coasian logic

Document type: Working Paper
Collection: Discussion Papers (School of Economics)
 
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Created: Mon, 22 Oct 2007, 13:44:30 EST by Belinda Weaver