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Single Object Auctions With Interdependent Values

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  • Dejan Trifunović

Abstract

This paper reviews single object auctions when bidders’ values of the object are interdependent. We will see how the auction forms could be ranked in terms of expected revenue when signals that bidders have about the value of the object are affiliated. In the discussion that follows we will deal with reserve prices and entry fees. Furthermore we will examine the conditions that have to be met for English auction with asymmetric bidders to allocate the object efficiently. Finally, common value auctions will be considered when all bidders have the same value for the object.

Suggested Citation

  • Dejan Trifunović, 2011. "Single Object Auctions With Interdependent Values," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 56(188), pages 125-170, January –.
    • Handle: RePEc:beo:journl:v:56:y:2011:i:188:p:125-170
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    References listed on IDEAS

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    1. Motty Perry & Philip J. Reny, 1999. "On The Failure of the Linkage Principle in Multi-Unit Auctions," Econometrica, Econometric Society, vol. 67(4), pages 895-900, July.
    2. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
    3. Milgrom, Paul, 1989. "Auctions and Bidding: A Primer," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 3-22, Summer.
    4. Menezes, Flavio M., 2008. "An Introduction to Auction Theory," OUP Catalogue, Oxford University Press, number 9780199275991.
    5. Robert Wilson, 1977. "A Bidding Model of Perfect Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 44(3), pages 511-518.
    6. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721, September.
    7. Levin, Dan & Smith, James L, 1996. "Optimal Reservation Prices in Auctions," Economic Journal, Royal Economic Society, vol. 106(438), pages 1271-1283, September.
    8. Dejan Trifunović, 2010. "Optimal Auction Mechanisms With Private Values," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 55(184), pages 71-112, January –.
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    Cited by:

    1. Dejan Trifunovic, 2014. "Sequential Auctions And Price Anomalies," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 59(200), pages 7-42, January –.
    2. Dejan Trifunović & Đorđe Mitrović, 2016. "Price Discrimination, Entry, And Switching Costs In Network Competition," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 61(209), pages 129-160, April - J.

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    More about this item

    Keywords

    Affiliation; The linkage principle; Winner’s curse; Common value auctions; Ex-post equilibrium.;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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