Auctions in which losers set the price

Mezzetti, Claudio and Tsetlin, Ilia (2009) Auctions in which losers set the price. Games and Economic Behavior, 66 2: 855-864. doi:10.1016/j.geb.2008.06.006


Author Mezzetti, Claudio
Tsetlin, Ilia
Title Auctions in which losers set the price
Journal name Games and Economic Behavior   Check publisher's open access policy
ISSN 0899-8256
Publication date 2009
Sub-type Article (original research)
DOI 10.1016/j.geb.2008.06.006
Volume 66
Issue 2
Start page 855
End page 864
Total pages 10
Language eng
Subject 2002 Cultural Studies
2003 Language Studies
Abstract We study auctions of a single asset among symmetric bidders with affiliated values. We show that the second-price auction minimizes revenue among all efficient auction mechanisms in which only the winner pays, and the price only depends on the losers' bids. In particular, we show that the kth price auction generates higher revenue than the second-price auction, for all k > 2. If rationing is allowed, with shares of the asset rationed among the t highest bidders, then the (t + 1)st price auction yields the lowest revenue among all auctions with rationing in which only the winners pay and the unit price only depends on the losers' bids. Finally, we compute bidding functions and revenue of the kth price auction, with and without rationing, for an illustrative example much used in the experimental literature to study first-price, second-price and English auctions.
Keyword Affiliated values
Auctions
English auction
kth price auction
Rationing
Robust mechanism design
Second-price auction
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Unknown

Document type: Journal Article
Sub-type: Article (original research)
Collection: Scopus Import
 
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Created: Thu, 02 Jun 2016, 12:28:14 EST by Karen Warren