Optimal sequential auctions

Jofre-Bonet, Mireia and Pesendorfer, Martin ORCID: 0000-0002-0547-8711 (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
Divisions:	STICERD
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor
JEL classification:	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
Date Deposited:	09 Apr 2014 10:22
Last Modified:	07 Nov 2024 02:09
Projects:	SES 0214222
Funders:	NSF
URI:	http://eprints.lse.ac.uk/id/eprint/56438

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