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Revenue Guarantee Equivalence

Dirk Bergemann (), Benjamin Brooks and Stephen Morris ()

No 12964, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We revisit the revenue comparison of standard auction formats, including first-price, second-price, and English auctions. We rank auctions according to their revenue guarantees, i.e., the greatest lower bound of revenue across all informational environments, where we hold fixed the distribution of bidders' values. We conclude that if we restrict attention to the symmetric affiliated models of Milgrom and Weber (1982) and monotonic pure-strategy equilibria, first-price, second-price, and English auctions all have the same revenue guarantee, which is equal to that of the first-price auction as characterized by Bergemann, Brooks and Morris (2017). If we consider all equilibria or if we allow more general models of information, then first-price auctions have a greater revenue guarantee than all other auctions considered.

Keywords: affiliated values; common values; English auction; First-price auction; revenue equivalence; Revenue guarantee; revenue ranking; second-price auction (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
Date: 2018-05
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Journal Article: Revenue Guarantee Equivalence (2019) Downloads
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