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Second-Price Auctions with Private Entry Costs

Author

Listed:
  • Todd Kaplan

    (Department of Economics, University of Haifa, Haifa 3498838, Israel
    Department of Economics, University of Exeter, Exeter EX4 4PU, UK)

  • Aner Sela

    (Department of Economics, Ben Gurion University of the Negev, Beer-Sheva 8410501, Israel)

Abstract

We study asymmetric second-price auctions under incomplete information. The bidders have two potentially different, commonly known, valuations for the object and private information about their entry costs. The seller, however, does not benefit from these entry costs. We calculate the equilibrium strategies of the bidders and analyze the optimal design for the seller in this environment in terms of expected entry and the number of potential bidders.

Suggested Citation

  • Todd Kaplan & Aner Sela, 2022. "Second-Price Auctions with Private Entry Costs," Games, MDPI, vol. 13(5), pages 1-14, September.
    • Handle: RePEc:gam:jgames:v:13:y:2022:i:5:p:62-:d:918331
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    References listed on IDEAS

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    Cited by:

    1. Kaichen Zhang & Zixuan Yuan & Hui Xiong, 2024. "Optimized Cost Per Click in Online Advertising: A Theoretical Analysis," Papers 2405.14279, arXiv.org.

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    Keywords

    asymmetric auctions; entry costs;

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