Budget-Constrained Sequential Auctions with Incomplete Information

Working Papers from University of Toronto, Department of Economics

Abstract: I study a budget-constrained, private-valuation, sealed-bid sequential auction with two incompletely-informed, risk-neutral bidders in which the valuations and income may be non-monotonic functions of a bidder\\\'s type. Parameters permit the existence of multiple equilibrium symmetric bidding functions that differ in allocation, efficiency and revenue. The sequence of sale affects the competition for a good and therefore also affects revenue and the prices of each good in a systematic way that depends on the relationship among the valuations and incomes of bidders. The sequence of sale may affect prices and revenue even when the number of bidders is large relative to the number of goods. If a particular good, say α, is allocated to a strong bidder independent of the sequence of sale, then auction revenue and the price of good α is higher when good α is sold first.

Keywords: sequential auctions; budget constraints; efficiency; revenue; price; sequence. (search for similar items in EconPapers)
JEL-codes: C7 C72 L1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth and nep-mic
Date: 2006-04-21
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Related works:
Working Paper: Budget-Constrained Sequential Auctions With Incomplete Information (1989)
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