"Upping the ante": How to design efficient auctions with entry?

Laurent Lamy

Working Papers from HAL

Abstract: In the symmetric independent private value model, we revisit auctions with entry by adding two additional ingredients: difficulties to commit to the announced mechanism, in particular not to update the reserve price after bidders took their entry decisions, and seller's ex ante uncertainty on her reservation value which calls for flexibility. Shill bidding or ex post rights to cancel the sale may provide some valuable flexibility in second price auctions. However, both fail to be efficient since the seller may keep the good while it would be efficient to allocate it to the highest bidder. The English auction with jump bids and cancelation rights is shown to implement the first best in large environments. On the positive side, special emphasis is put on the equilibrium analysis of auctions with shill bidding and on a variety of associated new insights including counterintuitive comparative statics and a comparison with posted-prices.

Keywords: auctions; auctions with entry; shill bidding; commitment failure; hold-up; posted-price; cancelation rights; jump bids; bilateral asymmetric information (search for similar items in EconPapers)
Date: 2010-06
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00564888v1
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: “Upping the ante”: how to design efficient auctions with entry? (2013)
Working Paper: "Upping the ante": how to design efficient auctions with entry? (2013)
Working Paper: "Upping the ante": how to design efficient auctions with entry? (2013)
Working Paper: "Upping the ante": How to design efficient auctions with entry? (2010)
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