Comparing first and second price auctions with asymmetric bidders

Vlad Mares () and Jeroen Swinkels

International Journal of Game Theory, 2014, vol. 43, issue 3, 487-514

Abstract: We study procurement auctions in which, as is common in practice, a group of sellers (incumbents, qualified bidders) is given an advantage, based, for example, on better reliability, quality, or incumbency status. We show conditions under which for any given first price handicap auction, there is a simple second-price design which dominates it. This generalizes a previous result for the case of an auction with one insider and one outsider (Mares and Swinkels in J Econ Theory, 2013 ) and sharpens our understanding of the classical result by Maskin and Riley (Rev Econ Stud 67:413–438, 2000 ). Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Asymmetric auctions; Request for proposal; Differentiation; Mechanism design; First price auctions; Second price auctions; Procurement (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00182-013-0392-8

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