Tournament Auctions

Luca Anderlini and GaOn Kim

Working Papers from Georgetown University, Department of Economics

Abstract: We examine “tournament” second-price auctions in which N bidders compete for the right to participate in a second stage and contend against bidder N +1. When the first N bidders are committed so that their bids cannot be changed in the second stage, the analysis yields some unexpected results. The first N bidders consistently bid above their values in equilibrium. When bidder N + 1 is sufficiently stronger than the first N, overbidding leads to an increase in expected revenue in comparison to the standard second-price auction when N is large.

Keywords: Tournament Auctions; Overbidding; Revenue Equivalence (search for similar items in EconPapers)
JEL-codes: C70 C72 C79 (search for similar items in EconPapers)
Pages: 19
Date: 2024-02-14
New Economics Papers: this item is included in nep-gth and nep-mic
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Citations: View citations in EconPapers (1)

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Working Paper: Tournament Auctions (2024)
Working Paper: Tournament Auctions (2024)
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