On Auctions with Withdrawable Winning Bids

Michael H. Rothkopf
Additional contact information
Michael H. Rothkopf: RUTCOR and Rutgers University

Marketing Science, 1991, vol. 10, issue 1, 40-57

Abstract: This paper considers sealed bidding in which bidders may submit two or more bids and after the bids are opened may, perhaps at a cost, withdraw bids that are more aggressive than would be necessary to win. Such withdrawal strategies are sometimes followed, but currently are surreptitious. However, legitimization of them would create potentially useful market mechanisms of potential interest to government agencies. These market mechanisms are also of theoretical interest since they are intermediate between first-price and second-price auctions. This paper presents models of such auctions. Both decision-theoretic models (applicable to surreptitious use of withdrawal strategies) and game theoretic models appropriate for openly withdrawable bid situations are developed. We describe a particular auction in which a winning bid was withdrawn and fit one of our decision theoretic models to data from it.

Keywords: negotiations; bidding (search for similar items in EconPapers)
Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://dx.doi.org/10.1287/mksc.10.1.40 (application/pdf)

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:inm:ormksc:v:10:y:1991:i:1:p:40-57

Access Statistics for this article

More articles in Marketing Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().