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Auctions with Limited Commitment

Qingmin Liu, Konrad Mierendorff, Xianwen Shi and Weijie Zhong

Working Papers from University of Toronto, Department of Economics

Abstract: We study the role of limited commitment in a standard auction environment. In each period, the seller can commit to an auction with a reserve price but not to future reserve prices. We characterize the set of equilibrium profits attainable for the seller as the period length vanishes. An immediate sale by efficient auction is optimal when there are at least three buyers. For many natural distributions two buyers is enough. Otherwise, we give conditions under which the maximal profit is attained through continuously declining reserve prices.

Keywords: Auctions; Limited Commitment; Mechanism Design; Coase Conjecture (search for similar items in EconPapers)
JEL-codes: D42 D44 D82 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2018-09-05
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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Journal Article: Auctions with Limited Commitment (2019) Downloads
Working Paper: Auctions with Limited Commitment (2013) Downloads
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