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On favoritism in auctions with entry

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  • Arozamena, Leandro
  • Weinschelbaum, Federico

Abstract

We examine the problem of endogenous entry in a single-unit auction when the seller's welfare depends positively on the utility of a subset of potential bidders. We show that, unless the seller values those bidders' welfare more than her own "private" utility, a nondiscriminatory auction is optimal.

Suggested Citation

  • Arozamena, Leandro & Weinschelbaum, Federico, 2011. "On favoritism in auctions with entry," Economics Letters, Elsevier, vol. 110(3), pages 265-267, March.
    • Handle: RePEc:eee:ecolet:v:110:y:2011:i:3:p:265-267
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    Cited by:

    1. Leandro Arozamena & Federico Weinschelbaum & Juan-José Ganuza, 2021. "Renegotiation and Discrimination in Symmetric Procurement Auctions," Department of Economics Working Papers 2021_09, Universidad Torcuato Di Tella.
    2. Boris Ginzburg, 2021. "Optimal Price Of Entry Into A Competition," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 280-286, January.
    3. Constantino Hevia & Martin Gonzalez‐Rozada & Martin Sola & Fabio Spagnolo, 2015. "Estimating and Forecasting the Yield Curve Using A Markov Switching Dynamic Nelson and Siegel Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 30(6), pages 987-1009, September.
    4. Leandro Arozamena & Nicholas Shunda & Federico Weinschelbaum, 2014. "Optimal nondiscriminatory auctions with favoritism," Economics Bulletin, AccessEcon, vol. 34(1), pages 252-262.
    5. Arozamena, Leandro & Ganuza, Juan-José & Weinschelbaum, Federico, 2023. "Renegotiation, discrimination and favoritism in symmetric procurement auctions," European Economic Review, Elsevier, vol. 159(C).
    6. Hanspach, Philip, 2023. "The home bias in procurement. Cross-border procurement of medical supplies during the Covid-19 pandemic," International Journal of Industrial Organization, Elsevier, vol. 89(C).

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    More about this item

    Keywords

    Auctions Favoritism Free entry Endogenous number of bidders;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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