Sequential vs. Single-Round Uniform-Price Auctions

Claudio Mezzetti, Aleksandar Pekec and Ilia Tsetlin
Additional contact information
Aleksandar Pekec: The Fuqua School of Business, Duke University
Ilia Tsetlin: INSEAD

No 2004.147, Working Papers from Fondazione Eni Enrico Mattei

Abstract: We study sequential and single-round uniform-price auctions with affiliated values. We derive symmetric equilibrium for the auction in which k1 objects are sold in the first round and k2 in the second round, with and without revelation of the first-round winning bids. We demonstrate that auctioning objects in sequence generates a lowballing effect that reduces first-round revenue. Thus, revenue is greater in a single-round, uniform auction for k = k1 + k2 objects than in a sequential uniform auction with no bid announcement. When the first-round winning bids are announced, we also identify two informational effects: a positive effect on second-round price and an ambiguous effect on first-round price. The expected first-round price can be greater or smaller than with no bid announcement, and greater or smaller than the expected price in a single-round uniform auction. As a result, total expected revenue in a sequential uniform auction with winning-bids announcement can be greater or smaller than in a single-round uniform auction.

Keywords: Multi-unit auctions; Sequential auctions; Uniform-price auction; Affiliated values; Information revelation (search for similar items in EconPapers)
JEL-codes: D42 D44 (search for similar items in EconPapers)
Date: 2004-12
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Sequential vs. single-round uniform-price auctions (2008)
Working Paper: Sequential vs. Single-Round Uniform-Price Auctions (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2004.147

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