Revenue Guarantee Equivalence

Dirk Bergemann, Benjamin Brooks and Stephen Morris

American Economic Review, 2019, vol. 109, issue 5, 1911-29

Abstract: We revisit the revenue comparison of standard auction formats, including first-price, second-price, and English auctions. We rank auctions according to their revenue guarantees, i.e., the greatest lower bound of revenue across all informational environments, where we hold fixed the distribution of bidders' values. We conclude that if we restrict attention to the symmetric affiliated models of Milgrom and Weber (1982) and monotonic pure-strategy equilibria, first-price, second-price, and English auctions are revenue guarantee equivalent: they have the same revenue guarantee, which is equal to that of the first-price auction as characterized by Bergemann, Brooks, and Morris (2017). If we consider all equilibria or if we allow more general models of information, then first-price auctions have a greater revenue guarantee than all other auctions considered.

JEL-codes: D44 D83 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/aer.20180773
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Citations: View citations in EconPapers (6)

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Working Paper: Revenue Guarantee Equivalence (2018)
Working Paper: Revenue Guarantee Equivalence (2018)
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