The Shill Bidding Effect versus the Linkage Principle

Laurent Lamy

PSE-Ecole d'économie de Paris (Postprint) from HAL

Abstract: The analysis of second price auctions with externalities is utterly modified if the seller is unable to commit not to participate in the mechanism. For the General Symmetric Model introduced by Milgrom and Weber [P. Milgrom, R. Weber, A theory of auctions and competitive bidding, Econometrica 50 (1982) 1089-1122] we characterize the full set of separating equilibria that are symmetric among buyers and with a strategic seller being able to bid in the same way as any buyer through a so-called shill bidding activity. The revenue ranking between first and second price auctions is different from the one arising in Milgrom and Weber: the benefits from the highlighted 'Linkage Principle' are counterbalanced by the 'Shill Bidding Effect.'

Keywords: Auctions; Externalities; Linkage Principle; Shill bidding (search for similar items in EconPapers)
Date: 2009-01
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Published in Journal of Economic Theory, 2009, 144 (1), pp.390-413. ⟨10.1016/j.jet.2008.06.001⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: The Shill Bidding Effect versus the Linkage Principle (2009)
Working Paper: The Shill Bidding Effect versus the Linkage Principle (2009)
Working Paper: The 'Shill Bidding Effect' Versus the 'Linkage Principle' (2005)
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:hal:pseptp:halshs-00754404

DOI: 10.1016/j.jet.2008.06.001

Access Statistics for this paper

More papers in PSE-Ecole d'économie de Paris (Postprint) from HAL
Bibliographic data for series maintained by Caroline Bauer ().