Selective entry and auction design

Andrew Sweeting and Vivek Bhattacharya

International Journal of Industrial Organization, 2015, vol. 43, issue C, 189-207

Abstract: This article examines how different auction designs perform when entry is endogenous and selective, by which we mean that bidders with higher values are more likely to enter. In a model where potential bidders are symmetric, we show that three alternative designs can significantly outperform the ‘standard auction with simultaneous and free entry’ when entry is selective. When bidders are asymmetric, we show that level of bid preference that maximizes a seller’s revenues is significantly affected by the degree of selection. We also describe recent empirical and econometric work that shows that the degree of selection can be identified and estimated using standard types of auction data.

Keywords: Auctions; Market entry; Selection; Bid preferences (search for similar items in EconPapers)
JEL-codes: D44 L10 L13 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:43:y:2015:i:c:p:189-207

DOI: 10.1016/j.ijindorg.2015.03.004

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