Common value auctions with independent types

Fernando Branco*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)

Abstract

In this paper I consider a common value model, with independent types, where the ex-post value of the good is influenced by the bidders' information at the auction stage. The seller cannot fully extract the surplus. In a symmetric model the optimal mechanism can be implemented through first price, second price, or English auctions; but not through a Dutch auction. Other properties of the optimal auctions are that the seller's reservation price is endogenous, and that in sealed bid auctions the price may exceed the value of the object (winner's curse).

Original languageEnglish
Pages (from-to)283-309
Number of pages27
JournalReview of Economic Design
Volume2
Issue number1
DOIs
Publication statusPublished - 1996

Keywords

  • Common values
  • Rent extraction
  • Standard auctions

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