Auctions with Numerous Bidders

Silvia Caserta () and Casper G. de Vries ()
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Silvia Caserta: Faculty of Economics, Erasmus Universiteit Rotterdam

No 05-031/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We study auctions in which the number of potential bidders is large, such as in Internet auctions. With numerous bidders, the expected revenue and the optimal bid function in a first price auction result in complicated expressions, except for a few simple distribution function for the bidders' valuations. We show that these expressions can be well approximated using extreme value theory without assuming a particular distribution function. The theory is applied to data from Internet auctions.

Keywords: Auctions; Numerous bidders; Extreme values; Internet auctions (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2005-03-22
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Persistent link: http://EconPapers.repec.org/RePEc:dgr:uvatin:20050031

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