When should bidders learn reserve prices?

Onur Koska and Frank Stähler

No 1712, ERC Working Papers from ERC - Economic Research Center, Middle East Technical University

Abstract: This paper discusses the role of reserve prices when the signal of each bidder is positively affiliated with the seller's signal. We distinguish three reserve price designs: a public reserve price, announced before the auction starts, a revealed reserve price, disclosed when a bid matches it, and a secret reserve price that is disclosed after the highest bid has been reached. We show that a public or a revealed reserve price are strategically equivalent, and we show that no seller will set a secret reserve price.

Keywords: Auctions with affiliation; optimal reserve prices. (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2017-10, Revised 2017-10
New Economics Papers: this item is included in nep-des, nep-mic and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:met:wpaper:1712

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