Optimal auctions with simultaneous and costly participation

Gorkem Celik, Okan Yilankaya

Research output: Contribution to journalArticle

13 Citations (Scopus)

Abstract

We study the optimal auction problem with participation costs in the symmetric independent private values setting, where bidders know their valuations when they make independent participation decisions. After characterizing the optimal auction in terms of participation cutoffs, we provide an example where it is asymmetric. We then investigate when the optimal auction will be symmetric/asymmetric and the nature of possible asymmetries. We also show that, under some conditions, the seller obtains her maximal profit in an (asymmetric) equilibrium of an anonymous second price auction. In general, the seller can also use non-anonymous auctions that resemble the ones that are actually observed in practice.

Original languageEnglish
Article number24
JournalB.E. Journal of Theoretical Economics
Volume9
Issue number1
DOIs
Publication statusPublished - Jan 1 2009

Keywords

  • Asymmetry
  • Bidding preferences
  • Endogenous entry
  • Optimal auctions
  • Participation costs

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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