Auctions with Imperfect Commitment when the Reserve May Serve as a Signal

Byoung Jun () and Elmar Wolfstetter

No 4586, CESifo Working Paper Series from CESifo

Abstract: If bidders are uncertain whether the auctioneer sticks to the announced reserve, some bidders respond by strategic non-participation, speculating that the auctioneer may revoke the reserve. However, the reserve inadvertently signals the auctioneer’s type, which drives a unique separating and a multitude of pooling equilibria. If one eliminates belief systems that violate the “intuitive criterion”, one obtains a unique equilibrium reserve price equal to the seller’s own valuation. Paradoxically, even if bidders initially believe that the auctioneer is bound by his reserve almost with certainty, commitment has no value.

Keywords: auctions; signaling; imperfect commitment (search for similar items in EconPapers)
JEL-codes: D21 D43 D44 D45 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp4586.pdf (application/pdf)

Related works:
Working Paper: Auctions with imperfect commitment when the reserve may serve as a signal (2013)
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:ces:ceswps:_4586

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().