IDEAS home Printed from https://ideas.repec.org/a/bla/buecrs/v77y2025i2p121-127.html
   My bibliography  Save this article

Reserve Price (In)equivalence: Shill Bidding to Lower the Reserve Price

Author

Listed:
  • Seungwon (Eugene) Jeong

Abstract

The optimal reserve price of the third‐price auction with two bidders differs from that with more than two bidders, whereas the optimal reserve price of the second‐price auction is the same regardless of the number of bidders. We generalize this result to the kth‐price multiunit auctions with single‐unit demand, and introduce a new kind of shill‐bidding incentive of bidders in order to lower the reserve price. Alongside budget constraints caused by overbidding, this may explain why third‐price auctions are rare in practice.

Suggested Citation

  • Seungwon (Eugene) Jeong, 2025. "Reserve Price (In)equivalence: Shill Bidding to Lower the Reserve Price," Bulletin of Economic Research, Wiley Blackwell, vol. 77(2), pages 121-127, April.
    • Handle: RePEc:bla:buecrs:v:77:y:2025:i:2:p:121-127
    DOI: 10.1111/boer.12480
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/boer.12480
    Download Restriction: no
    File URL: https://libkey.io/10.1111/boer.12480?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:buecrs:v:77:y:2025:i:2:p:121-127. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0307-3378 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.