Optimal sequential auctions

Mireia Jofre-Bonet and Martin Pesendorfer

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Sequential sealed first-price and open descending-price procurement auctions are studied. We examine which procurement auction rule achieves the low procurement cost. We show that the answer to this policy question depends on whether the items are complements or substitutes. With substitutes, the first-price procurement auction is preferred, while with complements, the open descending-price procurement auction is preferred. We also illustrate the procurement cost minimizing auction and the auction rule preferred by the bidders. With substitutes, bidders prefer the open descending-price procurement auction, while with complements bidders prefer the first-price procurement auction.

Keywords: Sequential auctions; Optimal auctions; Complementarities; Substitutes (search for similar items in EconPapers)
JEL-codes: D4 D44 D82 L00 L13 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-gth and nep-mic
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Citations: View citations in EconPapers (5)

Published in International Journal of Industrial Organization, March, 2014, 33, pp. 61-71. ISSN: 0167-7187

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http://eprints.lse.ac.uk/56438/ Open access version. (application/pdf)

Related works:
Journal Article: Optimal sequential auctions (2014)
Working Paper: Optimal sequential auctions (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:56438

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