Equilibria in Second Price Auctions with Participation Costs
Guofu Tan and
Okan Yilankaya ()
No 05.7, IEPR Working Papers from Institute of Economic Policy Research (IEPR)
We investigate equilibria of sealed-bid second price auctions with bidder participation costs in the independent private values environment. We focus on equilibria in cutoff strategies (participate and bid the valuation iff it is greater than the cutoff), since if a bidder finds it optimal to participate, she cannot do better than bidding her valuation. When bidders are symmetric, concavity (strict convexity) of the cumulative distribution function from which the valuations are drawn is a sufficient condition for uniqueness (multiplicity) within this class. We also study a special case with asymmetric bidders and show that concavity/convexity plays a similar role.
Keywords: Second price auctions; participation cost; entry fee; multiplicity of equilibria (search for similar items in EconPapers)
JEL-codes: C62 C72 D44 D82 (search for similar items in EconPapers)
Pages: 18 pages
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Journal Article: Equilibria in second price auctions with participation costs (2006)
Working Paper: Equilibria in Second Price Auctions with Participation Costs (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:scp:wpaper:05-7
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