On the use of reserve prices in the English auction

Fabio Micheluccci ()
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Fabio Micheluccci: Department of Economics, Ca' Foscari University of Venice

No 2021:31, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: We show that the introduction of a reserve price may promote entry, increase social welfare, and also induce higher revenues. The first two facts are in stark contrast with the relationship between reserve prices and entry pointed out by the literature. Our different result is obtained in a setting in which potential entrants arrive sequentially and face the risk of incurring losses conditional on winning the object on sale.

Keywords: entry; reserve prices; auctions; Loneliness; relationship quality; culture; mental health; physical health (search for similar items in EconPapers)
JEL-codes: D44 D82 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ven:wpaper:2021:31

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