EconPapers    
Economics at your fingertips  
 

Simultaneous vs. sequential auctions with risk averse bidders

Indranil Chakraborty

Games and Economic Behavior, 2019, vol. 113, issue C, 209-222

Abstract: In this paper we ask a basic question that is interesting for auctioneers and regulators when multiple units are on sale. Should multiple identical units be sold simultaneously through a single-shot auction or sequentially? We consider the risk effect of such a decision on bidders and show that in the independent private values setting the answer unambiguously depends on the pricing rule. A bidder's payoff uncertainty increases when the sale is sequenced under a pay-as-bid rule, but decreases under the Vickrey rule. We find that as a result the sequential auction is less desirable from revenue and ex post efficiency points of view under the pay-as-bid rule, and more desirable under the Vickrey rule, when the reserves in all auctions are set revenue-optimally.

Keywords: Multi-unit auction; Risk aversion; Sequential auction; Optimal reserve (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825618301568
Full text for ScienceDirect subscribers only

Related works:
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:eee:gamebe:v:113:y:2019:i:c:p:209-222

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-05-11
Handle: RePEc:eee:gamebe:v:113:y:2019:i:c:p:209-222