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More on phantom bidding

Author

Listed:
  • Ruqu Wang

    (Department of Economics, Queen's University, Kingston, Ontario, K7L 3N6, CANADA)

  • Emin Murat Dinlersoz

    (Department of Economics, University of Rochester, Rochester, NY 14627-0156, USA)

  • Parimal Kanti Bag

    (Department of Economics, Birkbeck College, University of London, 7-15 Gresse St., London W1P 2LL, UK)

Abstract

A phantom bidding model is analyzed for a sale auction. The following issues are addressed: the effects of phantom bidding on overall social welfare and buyers' profits. It is shown that social welfare may increase or decrease as the auctioneer switches from the fixed reserve price policy to phantom bidding. The buyers' profits will increase whenever social welfare increases.

Suggested Citation

  • Ruqu Wang & Emin Murat Dinlersoz & Parimal Kanti Bag, 2000. "More on phantom bidding," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 15(3), pages 701-707.
    • Handle: RePEc:spr:joecth:v:15:y:2000:i:3:p:701-707
    Note: Received: November 4, 1998; revised version: February 8, 1999
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    Citations

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    Cited by:

    1. Laurent Lamy, 2013. "“Upping the ante”: how to design efficient auctions with entry?," RAND Journal of Economics, RAND Corporation, vol. 44(2), pages 194-214, June.
    2. Itai Sher, 2012. "Optimal shill bidding in the VCG mechanism," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(2), pages 341-387, June.
    3. Takahiro Watanabe & Takehiko Yamato, 2008. "A choice of auction format in seller cheating: a signaling game analysis," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(1), pages 57-80, July.
    4. Gustavo Rodriguez, 2012. "Sequential auctions with imperfect quantity commitment," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(1), pages 143-173, January.
    5. Herzog, Dominic, 2014. "Shill Bidder's Behavior in a Second-Price Online Auction," Working papers 2014/03, Faculty of Business and Economics - University of Basel.
    6. Kosmopoulou, Georgia & De Silva, Dakshina G., 2007. "The effect of shill bidding upon prices: Experimental evidence," International Journal of Industrial Organization, Elsevier, vol. 25(2), pages 291-313, April.
    7. Coatney, Kalyn & Harri, Ardian, 2015. "Auctioneer Versus a Dominant Bidder: Evidence from a Cattle Auction," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 207368, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    English auction; Phantom bidding; Fixed/flexible reserve price.;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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