Auctions in which Losers Set the Price

Claudio Mezzetti and Ilia Tsetlin

No 269843, Economic Research Papers from University of Warwick - Department of Economics

Abstract: We study auctions of a single asset among symmetric bidders with a¢ liated values. We show that the second-price auction minimizes revenue among all e¢ cient auction mechanisms in which only the winner pays, and the price only depends on the losersíbids. In particular, we show that the k-th price auction generates higher revenue than the second-price auction, for all k > 2. If rationing is allowed, with shares of the asset rationed among the t highest bidders, then the (t + 1)-st price auction yields the lowest revenue among all auctions with rationing in which only the winners pay and the unit price only depends on the losersí bids. Finally, we compute bidding functions and revenue of the k-th price auction, with and without rationing, for an illustrative example much used in the experimental literature to study first-price, second-price and English auctions.

Keywords: Demand and Price Analysis; Public Economics (search for similar items in EconPapers)
Pages: 20
Date: 2008-02-28
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/269843/files/twerp_845.pdf (application/pdf)
https://ageconsearch.umn.edu/record/269843/files/twerp_845.pdf?subformat=pdfa (application/pdf)

Related works:
Journal Article: Auctions in which losers set the price (2009)
Working Paper: Auctions in which Losers Set the Price (2008)
Working Paper: Auctions in which Losers Set the Price (2007)
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:ags:uwarer:269843

DOI: 10.22004/ag.econ.269843

Access Statistics for this paper

More papers in Economic Research Papers from University of Warwick - Department of Economics
Bibliographic data for series maintained by AgEcon Search ().