Reserve price when bidders are asymmetric

Hikmet Gunay, Xin Meng and Mark Nagelberg

No 2013-19, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The authors analyze the optimal reserve price in a second price auction when there are N types of bidders whose valuations are drawn from different distribution functions. The seller cannot determine the specific type of each bidder. First, the authors show that the number of bidders affects the reserve price. Second, they give the sufficient conditions for the uniqueness of the optimal reserve price. Third, the authors find that if a bidder is replaced by a stronger bidder, the optimal reserve price may decrease. Finally, they give sufficient conditions that ensure the seller will not use a reserve price; hence, the auction will be efficient.

Keywords: auction; reserve (reservation) price; asymmetric bidders (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cta and nep-mic
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http://www.economics-ejournal.org/economics/discussionpapers/2013-19
https://www.econstor.eu/bitstream/10419/70480/1/737927216.pdf (application/pdf)

Related works:
Working Paper: Reserve Price When Bidders are Asymmetric (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201319

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