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BUNDLING IN AUCTIONS WITH NON‐LINEAR VALUATIONS *
Author(s) -
SMIRNOV VLADIMIR,
WAIT ANDREW
Publication year - 2011
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/j.1467-8454.2011.00408.x
Subject(s) - english auction , common value auction , generalized second price auction , product (mathematics) , revenue equivalence , object (grammar) , vickrey–clarke–groves auction , microeconomics , vickrey auction , reverse auction , auction theory , computer science , business , economics , mathematics , artificial intelligence , geometry
We examine when a revenue‐maximising auctioneer prefers to auction a homogenous product in one bundle (a single‐object auction) than to sell the item in two or more shares. When the items are super‐additive the auctioneer always prefers a single‐object auction. When the product valuations are sub‐additive, the auctioneer is more likely to choose a share auction when there are a large number of potential bidders. When there are a small number of bidders the auctioneer will tend to prefer a single‐object auction.