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First-price auctions with unobservable entry

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  • Cao, Xiaoyong
  • Wang, Wei

Abstract

We study the endogenous participation problem when bidders are characterized by a two-dimensional private information on values and participation costs in first-price auctions. Bidders make entry and bidding decisions simultaneously. Bidders participate whenever their costs are not greater than the expected revenue from participating. We show the existence and uniqueness of the symmetric equilibrium.

Suggested Citation

  • Cao, Xiaoyong & Wang, Wei, 2024. "First-price auctions with unobservable entry," Economics Letters, Elsevier, vol. 239(C).
    • Handle: RePEc:eee:ecolet:v:239:y:2024:i:c:s0165176524002465
    DOI: 10.1016/j.econlet.2024.111762
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    References listed on IDEAS

    as
    1. Campbell, Colin M., 1998. "Coordination in Auctions with Entry," Journal of Economic Theory, Elsevier, vol. 82(2), pages 425-450, October.
    2. Xin Feng & Jingfeng Lu & Yeneng Sun, 2020. "Ex Ante Efficient Mechanism With Private Entry Costs," Economic Inquiry, Western Economic Association International, vol. 58(3), pages 1531-1541, July.
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    7. Cao, Xiaoyong & Tian, Guoqiang, 2010. "Equilibria in first price auctions with participation costs," Games and Economic Behavior, Elsevier, vol. 69(2), pages 258-273, July.
    8. Xiaoyong Cao & Guofu Tan & Guoqiang Tian & Okan Yilankaya, 2018. "Equilibria in second-price auctions with private participation costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(2), pages 231-249, March.
    9. Celik, Gorkem & Yilankaya, Okan, 2017. "Resale in second-price auctions with costly participation," International Journal of Industrial Organization, Elsevier, vol. 54(C), pages 148-174.
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    13. Xiaoyong Cao & Guoqiang Tian, 2013. "Second‐Price Auctions with Different Participation Costs," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(1), pages 184-205, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Existence and uniqueness; Two-dimensional private information; First-price auctions; Simultaneous entry; Participation costs;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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