On Discrimination in Auctions with Endogenous Entry

Philippe Jehiel () and Laurent Lamy

American Economic Review, 2015, vol. 105, issue 8, 2595-2643

Abstract: When entry is exogenous, strong buyers should be discriminated against weak buyers to maximize revenues (Myerson 1981). When entry is endogenous so that entrants' expected payoffs do not depend on the proposed mechanism, optimal discrimination takes a completely different form. The revenue-maximizing equilibrium requires that there should be no discrimination with respect to entrants irrespective of their ex ante characteristics. Besides, those buyers who always participate should be discriminated against entrants independently of their strength. These predictions are independent of the equilibrium selection when the number of potential entrants grows large. The optimality of first-price auctions is also discussed. (JEL D44, H57)

JEL-codes: D44 H57 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.20131580
References: Add references at CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.20131580 (application/pdf)
https://www.aeaweb.org/aer/ds/10508/20131580_ds.zip (application/zip)
https://www.aeaweb.org/aer/app/10508/20131580_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: On Discrimination in Auctions with Endogenous Entry (2015)
Working Paper: On Discrimination in Auctions with Endogenous Entry (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:105:y:2015:i:8:p:2595-2643

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().