Declining Valuations in Sequential Auctions
Thomas Kittsteiner,
Jorg Nikutta and
Eyal Winter (mseyal@pluto.huji.ac.il)
Discussion Paper Series from The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem
Abstract:
We analyze an independent private values model where a number of objects are sold in sequential first- and second-price auctions. Bidders have unit demand and their valuation for an object is decreasing in the rank number of the auction in which it is sold. We derive efficient equilibria if prices are announced after each auction or if no information is given to bidders. We show that the sequence of prices constitutes a supermartingale. Even if we correct for the decrease in valuations for objects sold in later auctions we find that average prices are declining.
JEL-codes: D44 D82 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2004-01
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Citations: View citations in EconPapers (15)
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