scholarly journals Discrimination via Symmetric Auctions

2017 ◽  
Vol 9 (1) ◽  
pp. 275-314 ◽  
Author(s):  
Rahul Deb ◽  
Mallesh M. Pai
Keyword(s):  
Single Object ◽  
Sealed Bid ◽  
Auction Format ◽  
Private Value

Discrimination (for instance, along the lines of race or gender) is often prohibited in auctions. This is legally enforced by preventing the seller from explicitly biasing the rules in favor of bidders from certain groups (for example, by subsidizing their bids). In this paper, we study the efficacy of this policy in the context of a single object: independent private value setting with heterogeneous bidders. We show that restricting the seller to using an anonymous, sealed bid auction format (or, simply, a symmetric auction) imposes virtually no restriction on her ability to discriminate. Our results highlight that the discrepancy between the superficial impartiality of the auction rules and the resulting fairness of the outcome can be extreme. (JEL D44, D82)

Optimal Auctions with Endogenous Entry

2004 ◽  
Vol 4 (1) ◽  
Author(s):  
Lixin Ye
Keyword(s):  
Endogenous Entry ◽  
Free Entry ◽  
Single Object ◽  
Vickrey Auction ◽  
Sealed Bid ◽  
Ex Ante ◽  
Expected Revenue ◽  
Private Value ◽  
Equivalent Class ◽  
Auction Model

We consider a single object, independent private value auction model with entry. Potential bidders are ex ante symmetric and randomize about entry. After entry, each bidder incurs a cost, then learns her private value and a set of signals that may lead to updated beliefs about other entrants' valuations. It is shown that the Vickrey auction with free entry maximizes the expected revenue. Furthermore, if the information potentially available to bidders after entry is sufficiently rich, then the Vickrey auction, up to its equivalent class, is also the only optimal sealed-bid auction.

scholarly journals Using Field Experiments to Test Equivalence Between Auction Formats: Magic on the Internet

1999 ◽  
Vol 89 (5) ◽  
pp. 1063-1080 ◽  
Author(s):  
David Lucking-Reiley
Keyword(s):  
Theoretical Prediction ◽  
Field Experiments ◽  
The Internet ◽  
English Auctions ◽  
Dutch Auction ◽  
Sealed Bid ◽  
Laboratory Results ◽  
Price Auction ◽  
Auction Format ◽  
Auction Formats

William Vickrey's predicted equivalences between first-price sealed-bid and Dutch auctions, and between second-price sealed-bid and English auctions, are tested using field experiments that auctioned off collectible trading cards over the Internet. The results indicate that the Dutch auction produces 30-percent higher revenues than the first-price auction format, a violation of the theoretical prediction and a reversal of previous laboratory results, and that the English and second-price formats produce roughly equivalent revenues. (JEL C93, D44)

scholarly journals Optimal auction mechanisms with private values

2010 ◽  
Vol 55 (184) ◽  
pp. 71-112 ◽  
Author(s):  
Dejan Trifunovic
Keyword(s):  
Single Object ◽  
Revenue Equivalence ◽  
Equilibrium Behavior ◽  
Demand Theory ◽  
Sealed Bid ◽  
Optimal Auction ◽  
Private Values ◽  
Auction Mechanisms ◽  
Expected Revenue ◽  
Sealed Bid Auctions

This paper reviews equilibrium behavior in different auction mechanisms. We will deal with two types of open auctions, English and Dutch, and two types of sealed-bid auctions, first-price and second-price, when there is a single object for sale and bidders have private values. We show that under certain conditions all four auctions yield the same expected revenue to the seller, but once these assumptions are relaxed revenue equivalence does not hold. We will also study auctions by using standard tools from demand theory. Finally, we will analyze collusive behavior of bidders. The two goals that an auction mechanism has to achieve are efficient allocation and maximization of the seller's expected revenue.

scholarly journals IDENTIFICATION AND ESTIMATION IN A THIRD-PRICE AUCTION MODEL

2019 ◽  
Vol 36 (3) ◽  
pp. 386-409
Author(s):  
Andreea Enache ◽  
Jean-Pierre Florens
Keyword(s):  
Risk Aversion ◽  
Surprising Result ◽  
The Third ◽  
Transaction Prices ◽  
Sealed Bid ◽  
Private Values ◽  
Price Auction ◽  
Global Identification ◽  
Auction Format ◽  
Auction Model

The first novelty of this paper is that we show global identification of the private values distribution in a sealed-bid third-price auction model using a fully nonparametric methodology. The second novelty of the paper comes from the study of the identification and estimation of the model using a quantile approach. We consider an i.i.d. private values environment with risk-averse bidders. In the first place, we consider the case where the risk-aversion parameter is known. We show that the speed of convergence in process of our nonparametric estimator produces at the root-n parametric rate, and we explain the intuition behind this apparently surprising result. Next, we consider that the risk-aversion parameter is unknown, and we locally identify it using exogenous variation in the number of participants. We extend our procedure to the case where we observe only the bids corresponding to the transaction prices, and we generalize the model so as to account for the presence of exogenous variables. The methodological toolbox used to analyse identification of the third-price auction model can be employed in the study of other games of incomplete information. Our results are interesting, also from a policy perspective, as some authors recommend the use of the third-price auction format for certain Internet auctions. Moreover, we contribute to the econometric literature on auctions using a quantile approach.

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