A NOTE ON THE EFFECT OF ASYMMETRY ON REVENUE IN SECOND-PRICE AUCTIONS
Arieh Gavious () and
Yizhaq Minchuk ()
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Arieh Gavious: Faculty of Business Administration, Ono Academic College, Israel;
Yizhaq Minchuk: Department of Industrial Engineering and Management, Ben-Gurion University, Israel
International Game Theory Review (IGTR), 2012, vol. 14, issue 03, 1-8
Abstract:
We compare the seller's expected revenue in asymmetric second-price auctions with the benchmark case where all bidders have the average distribution. We show that with two bidders, asymmetry has a negative effect on revenue. However, forn > 2bidders there is no clear observation we can make. We prove that in the case of weak asymmetry, sellers prefer asymmetry over low valuations and symmetry over high valuations. In addition, we show that a good approximation for the expected revenue in the case of weak asymmetry can be obtained by calculating the revenue of the symmetric auction with identical distributions equal to the geometric or arithmetic average.
Keywords: Second-price auctions; asymmetric auctions; D44; D82 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)
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Persistent link: https://EconPapers.repec.org/RePEc:wsi:igtrxx:v:14:y:2012:i:03:n:s0219198912500193
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DOI: 10.1142/S0219198912500193
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