Optimal Price Ceilings in a Common Value Auction

Archishman Chakraborty

Economics Bulletin, 2002, vol. 3, issue 7, 1-7

Abstract: A simple common value auction is considered where it is optimal to set a ceiling price in addition to a reserve price. The ceiling price prevents the better informed bidder from outbidding the less informed bidders. This guarantees participation from the less informed bidders raising the seller's revenues. The seller is better off by selling the good in an auction with a price ceiling compared to selling the good at a fixed price.

JEL-codes: C7 D4 (search for similar items in EconPapers)
Date: 2002-04-18
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Citations: View citations in EconPapers (3)

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