Price Reveal Auctions

Andrea Gallice

No 437, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: A price reveal auction (PRA) is a descending price auction in which the current price of the item on sale is hidden. Buyers can privately observe the price only by paying a fee, and every time an agent does so, the price falls by a predetermined amount. We show that if the number of participants, n, is common knowledge, then in equilibrium a PRA replicates the outcome of a posted price mechanism. In particular, at most one buyer observes the price and the auction immediately ?nishes. In contrast, multiple entries can occur and pro?tability is enhanced when agents are uncertain about n. Under some conditions, a PRA may even yield higher expected revenues than standard auction formats.

Keywords: price reveal auctions; pay-per-bid auctions; endogenous price decrease. (search for similar items in EconPapers)
JEL-codes: C72 D44 (search for similar items in EconPapers)
Pages: pages 35
Date: 2015
New Economics Papers: this item is included in nep-gth and nep-mic
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.carloalberto.org/wp-content/uploads/2018/11/no.437.pdf (application/pdf)

Related works:
Journal Article: Price Reveal Auctions (2016)
Working Paper: Price Reveal Auctions (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:437

Access Statistics for this paper

More papers in Carlo Alberto Notebooks from Collegio Carlo Alberto Contact information at EDIRC.
Bibliographic data for series maintained by Giovanni Bert ().