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Optimal sequential auctions

Jofre-Bonet, Mireia and Pesendorfer, Martin (2014) Optimal sequential auctions. International Journal of Industrial Organization, 33 . pp. 61-71. ISSN 0167-7187

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Abstract

Sequential sealed first-price and open descending-price procurement auctions are studied. We examine which procurement auction rule achieves the low procurement cost. We show that the answer to this policy question depends on whether the items are complements or substitutes. With substitutes, the first-price procurement auction is preferred, while with complements, the open descending-price procurement auction is preferred. We also illustrate the procurement cost minimizing auction and the auction rule preferred by the bidders. With substitutes, bidders prefer the open descending-price procurement auction, while with complements bidders prefer the first-price procurement auction.

Item Type: Article
Official URL: http://www.journals.elsevier.com/international-jou...
Additional Information: © 2014 Elsevier B.V
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: D - Microeconomics > D4 - Market Structure and Pricing
D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information
L - Industrial Organization > L0 - General > L00 - General
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
Sets: Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Funders: NSF
Projects: SES 0214222
Date Deposited: 09 Apr 2014 10:22
URL: http://eprints.lse.ac.uk/56438/

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