Upping the ante”: how to design efficient auctions with entry?

Article dans une revue: Of primary importance in auction design is the set of strategies available to the seller at the auction stage. We first formalize hold-up regarding entry costs that preys on second-price auctions when the seller may engage in a costly shill-bidding activity. We derive the optimal reserve and show how shill bidding can make posted prices outperforming auctions. Second, we advocate for a new regulation where shills would be banned but with the possibility of canceling sales ex post, which offers some valuable flexibility: the English auction with jump bids implements, then, the first best in general environments.

Auteur(s)

Laurent Lamy

Revue
  • RAND Journal of Economics
Date de publication
  • 2013
Mots-clés
  • Auction Design
Pages
  • 194-214
Version
  • 1
Volume
  • 44