Optimal Auctions with Simultaneous and Costly Participation

Gorkem Celik () and Okan Yilankaya
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Okan Yilankaya: University of British Columbia and Koç University

The B.E. Journal of Theoretical Economics, 2009, vol. 9, issue 1

Abstract: We study the optimal auction problem with participation costs in the symmetric independent private values setting, where bidders know their valuations when they make independent participation decisions. After characterizing the optimal auction in terms of participation cutoffs, we provide an example where it is asymmetric. We then investigate when the optimal auction will be symmetric/asymmetric and the nature of possible asymmetries. We also show that, under some conditions, the seller obtains her maximal profit in an (asymmetric) equilibrium of an anonymous second price auction. In general, the seller can also use non-anonymous auctions that resemble the ones that are actually observed in practice.

Keywords: optimal auctions; participation costs; endogenous entry; asymmetry; bidding preferences (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 (search for similar items in EconPapers)
Date: 2009

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Related works:
Working Paper: Optimal Auctions with Simultaneous and Costly Participation (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:bpj:bejtec:v:9:y:2009:i:1:n:24

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