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Common‐value auctions with asymmetrically informed bidders and reserve price
Author(s) -
Shi Xinyan
Publication year - 2013
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/j.1742-7363.2013.12012.x
Subject(s) - common value auction , vickrey auction , english auction , dutch auction , generalized second price auction , auction theory , microeconomics , economics , revenue equivalence , vickrey–clarke–groves auction , value (mathematics) , reverse auction , private information retrieval , reservation price , mathematical economics , computer science , computer security , machine learning
In this paper, I study common‐value auctions with a reserve price. First, I consider a static auction in which one bidder has perfect information about the value of the object and the other does not have any private information. Then I consider a dynamic auction in which the informed bidder obtains private information in two consecutive periods, while the other does not have any private information. In both auctions, I derive the optimal reserve price and establish conditions under which the exclusion principle fails. In addition, I compare the dynamic auction with the single‐period auction and provide conditions under which one auction outperforms the other.