Optimal advertising of auctions

Nora Szech

Journal of Economic Theory, 2011, vol. 146, issue 6, 2596-2607

Abstract: We study a symmetric independent private values auction model where the revenue-maximizing seller faces a cost cn of attracting n bidders to the auction. If the distribution of valuations possesses an increasing failure rate (IFR), the seller overinvests in attracting bidders compared to the social optimum. Conversely, if the distribution is DFR, the seller underinvests compared to the social optimum. If the distribution of valuations becomes more dispersed, both, a revenue- and a welfare-maximizing seller, attract more bidders.

Keywords: Auctions; Advertising; Order statistics (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:146:y:2011:i:6:p:2596-2607

DOI: 10.1016/j.jet.2011.10.010

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