Pre-auction offers in asymmetric first-price and second-price auctions

Rene Kirkegaard () and Per Baltzer Overgaard ()

Games and Economic Behavior, 2008, vol. 63, issue 1, pages 145-165

Abstract: We consider first-price and second-price auctions with asymmetric buyers, and examine whether pre-auction offers to a subset of buyers are profitable. A single offer is never profitable prior to a second-price auction, but may be profitable prior to a first-price auction. However, a sequence of offers is profitable in either type of auction. In our model, suitably chosen pre-auction offers work because they move the assignment when bidder valuations are "near the top" closer to the optimal, revenue-maximizing assignment.

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Related works:
Working Paper: Pre-Auction Offers in Asymmetric First-Price and Second-Price Auctions (2005)
Working Paper: Pre-Auction Offers in Asymmetric First-Price and Second-Price Auctions (2005)
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