Auctions with Almost Homogeneous Bidders

Bernard Lebrun ()

Working Papers from York University, Department of Economics

Abstract: We deviate from the symmetric case of the independent private value model by allowing the bidders’ value distributions, which depend on parameters, to be slightly different. We show that previous results about the equality to the first-order in the parameters between revenues from the second-price auction and other auction mechanisms follow from the joint differentiability of the equilibria with respect to the parameters. We prove this differentiability for the first-price auction and obtain general formulas for the different first-order effects. From our results about the first-price auction, we analytically generate examples with continuous distributions where a stochastic improvement to a bidder’s value distribution reduces his equilibrium payoff. In another application, we show that, starting from competition among cartels of equal sizes, allowing in a small number of members from other cartels can be profitable only if the members or the synergies between them are strong enough.

Keywords: Independent private value model; auctions; asymmetry; first-price auction, second-price auction; differentiability; revenue equivalence theorem (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2006
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://dept.econ.yorku.ca/research/workingPapers/w ... hombid-wp-lebrun.pdf

Related works:
Journal Article: Auctions with almost homogeneous bidders (2009)
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:yca:wpaper:2006_7

Access Statistics for this paper

More papers in Working Papers from York University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Support ( this e-mail address is bad, please contact ).