Improving Efficiency Using Reserve Prices: An Equilibrium Analysis of Core-Selecting Auctions

Ryuji Sano

No 926, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: This study analyzes the equilibrium of core-selecting auctions under incomplete information. We consider the ascending proxy auction of Ausubel and Milgrom (2002) in a stylized environment with two goods and three bidders: two local and one global. Local bidders with a sufficiently high value bid almost truthfully. In contrast, local bidders with a sufficiently low value submit a zero bid because of free-riding incentive. We also provide equilibrium with reserve prices, and show that a reserve price for local bidders improve both allocative efficiency and revenue in equilibrium.

Keywords: core-selecting auctions; ascending proxy auction; reserve price (search for similar items in EconPapers)
JEL-codes: D44 D47 (search for similar items in EconPapers)
Pages: 26pages
Date: 2015-09
New Economics Papers: this item is included in nep-ger and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.kier.kyoto-u.ac.jp/DP/DP926.pdf (application/pdf)

Related works:
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:kyo:wpaper:926

Access Statistics for this paper

More papers in KIER Working Papers from Kyoto University, Institute of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Makoto Watanabe ().