Third-Price Auctions, kth-Price Auctions, and Lotteries

Pak-Sing Choi and Felix Munoz-Garcia

Chapter 5 in Auction Theory, 2021, pp 165-185 from Springer

Abstract: Abstract This chapter generalizes previous auction formats by allowing the winning bidder to pay the kth highest bid, while all losing bidders pay zero. This implies that in the first-price auction, we have that k = 1, as the winning bidder pays the highest bid; and in the second-price auction, k = 2, as he pays the second-highest bid. A similar argument applies to the third-price auction, where k = 3, as the winning bidder pays the third-highest bid, and, more generally, to any other auction format where k > 3.

Keywords: Third-price auction; Kth-price auction; Lotteries; Political campaigns; Beta distribution; Revenue equivalence principle (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/978-3-030-69575-0_5

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