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Discrimination via Symmetric Auctions

Author

Listed:
  • Rahul Deb
  • Mallesh M. Pai

Abstract

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.

Suggested Citation

  • Rahul Deb & Mallesh M. Pai, 2017. "Discrimination via Symmetric Auctions," American Economic Journal: Microeconomics, American Economic Association, vol. 9(1), pages 275-314, February.
    • Handle: RePEc:aea:aejmic:v:9:y:2017:i:1:p:275-314
    Note: DOI: 10.1257/mic.20150121
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    Citations

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    Cited by:

    1. Mariann Ollar & Antonio Penta, 2019. "Implementation via Transfers with Identical but Unknown Distributions," Working Papers 1126, Barcelona School of Economics.
    2. Barbosa, Klenio & Boyer, Pierre C., 2021. "Discrimination in Dynamic Procurement Design with Learning-by-doing," International Journal of Industrial Organization, Elsevier, vol. 77(C).
    3. Korpela, Ville, 2018. "Procedurally fair implementation under complete information," Journal of Mathematical Economics, Elsevier, vol. 77(C), pages 25-31.
    4. Bernhardt, Dan & Liu, Tingjun & Sogo, Takeharu, 2020. "Costly auction entry, royalty payments, and the optimality of asymmetric designs," Journal of Economic Theory, Elsevier, vol. 188(C).
    5. Mariann Ollar & Antonio Penta, 2021. "A network solution to robust implementation: The case of identical but unknown distributions," Economics Working Papers 1776, Department of Economics and Business, Universitat Pompeu Fabra.
    6. Lang, Xu & Mishra, Debasis, 2024. "Symmetric reduced form voting," Theoretical Economics, Econometric Society, vol. 19(2), May.
    7. Azrieli, Yaron & Jain, Ritesh, 2018. "Symmetric mechanism design," Journal of Mathematical Economics, Elsevier, vol. 74(C), pages 108-118.
    8. Philippe Jehiel & Konrad Mierendorff, 2021. "Auction Design with Data-Driven Misspecifications," Papers 2107.00640, arXiv.org.
    9. Anja Prummer & Francesco Nava, 2023. "Value Design in Optimal Mechanisms," Economics working papers 2023-05, Department of Economics, Johannes Kepler University Linz, Austria.
    10. Kirkegaard, René, 2022. "Efficiency in asymmetric auctions with endogenous reserve prices," Games and Economic Behavior, Elsevier, vol. 132(C), pages 234-239.
    11. Kotowski, Maciej H., 2018. "On asymmetric reserve prices," Theoretical Economics, Econometric Society, vol. 13(1), January.
    12. Helene Mass & Nicolas Fugger & Vitali Gretschko & Achim Wambach, 2020. "Imitation Perfection—A Simple Rule to Prevent Discrimination in Procurement," American Economic Journal: Microeconomics, American Economic Association, vol. 12(3), pages 189-245, August.
    13. Xu Lang & Debasis Mishra, 2022. "Symmetric reduced form voting," Papers 2207.09253, arXiv.org, revised Apr 2023.
    14. Debasis Mishra & Xu Lang, 2022. "Symmetric reduced form voting," Discussion Papers 22-03, Indian Statistical Institute, Delhi.

    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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