Mezzetti, Claudio and Tsetlin, Ilia (2009) Auctions in which losers set the price. Games and Economic Behavior, Vol.66 (No.2). pp. 855-864. doi:10.1016/j.geb.2008.06.006

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Abstract

We Study auctions of a single asset among symmetric bidders with affiliated values. We show that the second-price auction minimizes revenue among all efficient auction mechanisms in which only the winner pays, and the price only depends oil the losers' bids. In particular, we show that the kth price auction generates higher revenue than the second-price auction. for all k > 2. If rationing is allowed, with shares of the asset rationed among the t highest bidders, then the (t + 1)st price auction yields the lowest revenue among all auctions with rationing in which only the winners pay and the unit price only depends oil the losers' bids. Finally, we Compute bidding functions and revenue of the kth price auction, with and without rationing. for an illustrative example much used in the experimental literature to Study first-price, second-price and English auctions. (C) 2008 Elsevier Inc. All rights reserved.

Item Type:	Journal Article
Subjects:	H Social Sciences > HC Economic History and Conditions
Divisions:	Faculty of Social Sciences > Economics
Journal or Publication Title:	Games and Economic Behavior
Publisher:	Elsevier
ISSN:	0899-8256
Official Date:	July 2009
Dates:	Date Event July 2009 Published
Volume:	Vol.66
Number:	No.2
Number of Pages:	10
Page Range:	pp. 855-864
DOI:	10.1016/j.geb.2008.06.006
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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