Asymmetric Auctions with Discretely Distributed Valuations

Ceesay Muhammed (), Doni Nicola () and Domenico Menicucci
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Ceesay Muhammed: Department of Economics and Management, University of Firenze, Via delle Pandette 32, I-50127 Firenze, Italy
Doni Nicola: Department of Economics and Management, University of Firenze, Via delle Pandette 32, I-50127 Firenze, Italy

The B.E. Journal of Theoretical Economics, 2025, vol. 25, issue 1, 99-118

Abstract: We examine a two-bidder auction setting in which the distributions for the bidders’ valuations are asymmetric over a support consisting of three elements. For the first price auction, for each parameter values we derive the unique Bayes Nash Equilibrium in closed form. We rely on this result to compare the revenue in the first price auction with the revenue in the second price auction. The latter is often revenue superior to the former, and we determine precisely, given a distribution for the value of a bidder, when a distribution for the value of the other bidder exists such that the first price auction is superior to the second price auction.

Keywords: asymmetric auctions; first price auction; second price auction; revenue ranking (search for similar items in EconPapers)
JEL-codes: D44 D82 (search for similar items in EconPapers)
Date: 2025
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Working Paper: Asymmetric Auctions with Discretely Distributed Valuations (2024)
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DOI: 10.1515/bejte-2024-0109

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