Different Number of Bidders in Sequential Auctions

Xin Meng and Hikmet Gunay

Hitotsubashi Journal of Economics, 2022, vol. 63, issue 1, 72-85

Abstract: We analyze the correct selling order in a second-price sequential auction for two heterogeneous synergistic goods with local and global bidders. We prove that as the number of local bidders in the second auction approaches infinity, the outcome is always efficient. However, as the number of local bidders in the first auction approaches infinity, the outcome is inefficient with a positive probability. By using simulations, we show that selling the good with more finite bidders in the second auction results in a more efficient outcome. If the selling order is incorrect, the probabilityof an inefficient outcome is around 19%.

Keywords: Sequential auctions; efficiency; global bidder (search for similar items in EconPapers)
JEL-codes: D44 D82 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitjec:v:63:y:2022:i:1:p:72-85

DOI: 10.15057/hje.2022004

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