Auctions with almost homogeneous bidders

Bernard Lebrun

Journal of Economic Theory, 2009, vol. 144, issue 3, pages 1341-1351

Abstract: We prove that, around the symmetric case, where the values are identically distributed, the equilibrium of the first price auction is jointly differentiable with respect to general bidder-specific parameters of the value distributions. We show that the revenue equivalence between the first-price and the second-price auctions to the first-order in the size of the parameters is an immediate consequence of this differentiability and the Revenue Equivalence Theorem; thereby formally establishing the first-order equivalence Fibich et al. [G. Fibich, A. Gavious, A. Sela, Revenue equivalence in asymmetric auctions, J. Econ. Theory 115 (2004) 309-321] noticed for their particular perturbation.

Keywords: Independent; private; value; model; Auctions; Asymmetry; First-price; auction; Second-price; auction; Differentiability; Revenue; Equivalence; Theorem (search for similar items in EconPapers)
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:eee:jetheo:v:144:y:2009:i:3:p:1341-1351

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