Optimal Reserve Prices

Onur Koska and Frank Stähler

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: This note scrutinizes the optimal reserve price in any ascending bid auction. If the auction may imply outcomes such that the winning bid is below the seller’s reservation utility, the seller will always set an optimal reserve price strictly larger than her reservation utility. The optimal reserve price depends only on two largest order statistics of the distribution of bids.

Keywords: Auctions; Interdependent values; Optimal reserve prices (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2022-03-01
New Economics Papers: this item is included in nep-dem and nep-des
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:22/07

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