Sequential auctions with heterogeneous bidders

Stéphanie Vincent Lyk-Jensen ()

No 1998-19, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: Motivated by empirical findings from jewellery sold at public English auctions at Crédit Municipal de Paris, we study the effect of the presence of two types of bidders on equilibrium strategies and on the price tendency. We consider a second-price auction (sealed-bid og English auction) where bidders are heterogeneous. Some bidders, “professionals”, have multi-unit demand and decreasing marginal utility. Others, “amateurs” are interested in only one object. In an independent private values setting, we characterize an equilibrium when there is one or more professionals and find different price tendencies according to the nature of the demand of amateurs, thus confirming the fact that heterogeneity implies different price matters.

Keywords: English auction; sealed-bid auction; multi-unit demand; decreasing marginal utility; heterogeneous bidders (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Pages: 19 pages
Date: 1998-10
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuieci:1998-19

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