IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v162y2018icp34-36.html
   My bibliography  Save this article

A comparative analysis of multi-unit sequential auction under optimal reserve

Author

Listed:
  • Chakraborty, Indranil

Abstract

We consider sequential auction of two identical objects under the second-price rule when reserves are set optimally. We find that bidders bid more in the sequential auction when they are risk averse (CARA) than when they are not. The expected revenue is higher under the Vickrey rule than under the uniform-price rule. Hence the sequential auction generates higher expected revenue than both the Vickrey auction and uniform-price auction when bidders have constant absolute risk aversion.

Suggested Citation

  • Chakraborty, Indranil, 2018. "A comparative analysis of multi-unit sequential auction under optimal reserve," Economics Letters, Elsevier, vol. 162(C), pages 34-36.
    • Handle: RePEc:eee:ecolet:v:162:y:2018:i:c:p:34-36
    DOI: 10.1016/j.econlet.2017.10.019
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176517304354
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2017.10.019?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Richard Engelbrecht-Wiggans & Charles M. Kahn, 1998. "Multi-unit auctions with uniform prices," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 12(2), pages 227-258.
    2. Lawrence M. Ausubel & Peter Cramton & Marek Pycia & Marzena Rostek & Marek Weretka, 2014. "Demand Reduction and Inefficiency in Multi-Unit Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(4), pages 1366-1400.
    3. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
    4. McAfee R. Preston & Vincent Daniel, 1993. "The Declining Price Anomaly," Journal of Economic Theory, Elsevier, vol. 60(1), pages 191-212, June.
    5. Katzman, Brett, 1999. "A Two Stage Sequential Auction with Multi-Unit Demands," Journal of Economic Theory, Elsevier, vol. 86(1), pages 77-99, May.
    6. Caillaud, Bernard & Mezzetti, Claudio, 2004. "Equilibrium reserve prices in sequential ascending auctions," Journal of Economic Theory, Elsevier, vol. 117(1), pages 78-95, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ma, Gang & Zheng, Junjun & Wei, Ju & Wang, Shilei & Han, Yefan, 2021. "Robust optimization strategies for seller based on uncertainty sets in context of sequential auction," Applied Mathematics and Computation, Elsevier, vol. 390(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wedad Elmaghraby, 2005. "The Effect of Asymmetric Bidder Size on an Auction's Performance: Are More Bidders Always Better?," Management Science, INFORMS, vol. 51(12), pages 1763-1776, December.
    2. Chakraborty, Indranil, 2019. "Simultaneous vs. sequential auctions with risk averse bidders," Games and Economic Behavior, Elsevier, vol. 113(C), pages 209-222.
    3. Bresky, Michal, 2013. "Revenue and efficiency in multi-unit uniform-price auctions," Games and Economic Behavior, Elsevier, vol. 82(C), pages 205-217.
    4. Elena Katok & Alvin E. Roth, 2004. "Auctions of Homogeneous Goods with Increasing Returns: Experimental Comparison of Alternative "Dutch" Auctions," Management Science, INFORMS, vol. 50(8), pages 1044-1063, August.
    5. Yao, Zhiyong & Xiao, Zhiguo, 2013. "A note on sequential auctions with multi-unit demand," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 276-281.
    6. Peter Cramton, 2002. "Spectrum Auctions," Papers of Peter Cramton 01hte, University of Maryland, Department of Economics - Peter Cramton, revised 16 Jul 2001.
    7. Brett E Katzman, 2009. "Asymptotic properties of equilibrium in discriminatory and uniform price ipv multi-unit auctions," Economics Bulletin, AccessEcon, vol. 29(2), pages 834-846.
    8. Cumpston, Anne & Khezr, Peyman, 2020. "Multi-Unit Auctions: A Survey of Theoretical Literature," MPRA Paper 101336, University Library of Munich, Germany.
    9. Yixin Lu & Alok Gupta & Wolfgang Ketter & Eric van Heck, 2019. "Dynamic Decision Making in Sequential Business-to-Business Auctions: A Structural Econometric Approach," Management Science, INFORMS, vol. 65(8), pages 3853-3876, August.
    10. Richard Engelbrecht-Wiggans & John A. List & David H. Reiley, 2006. "Demand Reduction In Multi-Unit Auctions With Varying Numbers Of Bidders: Theory And Evidence From A Field Experiment ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 203-231, February.
    11. J. Reiß & Jens Schöndube, 2010. "First-price equilibrium and revenue equivalence in a sequential procurement auction model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 43(1), pages 99-141, April.
    12. Peter Cramton, 1997. "The FCC Spectrum Auctions: An Early Assessment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(3), pages 431-495, September.
    13. Betz, Regina & Seifert, Stefan & Cramton, Peter & Kerr, Suzi, 2010. "Auctioning greenhouse gas emissions permits in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(2), pages 1-20.
    14. Lawrence M. Ausubel & Peter Cramton, 1997. "Auctioning Securities," Papers of Peter Cramton 98wpas, University of Maryland, Department of Economics - Peter Cramton, revised Mar 1998.
    15. Stéphanie Vincent Lyk‐Jensen & Olivier Chanel, 2007. "Retailers and consumers in sequential auctions of collectibles," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 40(1), pages 278-295, February.
    16. Dejan Trifunović & Bojan Ristić, 2013. "Multi-Unit Auctions In The Procurement Of Electricity," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 58(197), pages 47-78, April – J.
    17. Roberto Burguet, 2000. "Auction theory: a guided tour," Investigaciones Economicas, Fundación SEPI, vol. 24(1), pages 3-50, January.
    18. David Lucking-Reiley & John A. List, 2000. "Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment," American Economic Review, American Economic Association, vol. 90(4), pages 961-972, September.
    19. Kenneth Hendricks & Ilke Onur & Thomas Wiseman, 2012. "Last-Minute Bidding in Sequential Auctions with Unobserved, Stochastic Entry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(1), pages 1-19, February.
    20. repec:ebl:ecbull:v:4:y:2004:i:8:p:1-14 is not listed on IDEAS
    21. Zulehner, Christine, 2009. "Bidding behavior in sequential cattle auctions," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 33-42, January.

    More about this item

    Keywords

    Sequential auction; Uniform-price auctions; Demand reduction; Multi-unit auctions; Risk averse bidders;
    All these keywords.

    JEL classification:

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

    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:eee:ecolet:v:162:y:2018:i:c:p:34-36. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    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.