Price Reveal Auctions

Andrea Gallice

No 15, Working papers from Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino

Abstract: A price reveal auction is a Dutch auction in which the current price of the item on sale remains hidden. Bidders can privately observe the price only by paying a fee, and every time a bidder does so, the price falls by a predetermined amount. We solve for the perfect Bayesian equilibria of the game. If the number of participants n is common knowledge, then in equilibrium at most one bidder observes the price and the profits that the mechanism raises, if any, are only marginally higher than those that would stem from a normal sale. If instead n is a random variable then multiple entry can occur and profitability is enhanced.

Keywords: pay-per-bid auctions; endogenous price decrease (search for similar items in EconPapers)
JEL-codes: C72 D44 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2012-11
New Economics Papers: this item is included in nep-bec, nep-com, nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.bemservizi.unito.it/repec/tur/wpapnw/m15.pdf First version, 2012 (application/pdf)

Related works:
Journal Article: Price Reveal Auctions (2016)
Working Paper: Price Reveal Auctions (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:tur:wpapnw:015

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