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Comparing first and second price auctions with asymmetric bidders

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  • Vlad Mares
  • Jeroen Swinkels

Abstract

We study procurement auctions in which, as is common in practice, a group of sellers (incumbents, qualified bidders) is given an advantage, based, for example, on better reliability, quality, or incumbency status. We show conditions under which for any given first price handicap auction, there is a simple second-price design which dominates it. This generalizes a previous result for the case of an auction with one insider and one outsider (Mares and Swinkels in J Econ Theory, 2013 ) and sharpens our understanding of the classical result by Maskin and Riley (Rev Econ Stud 67:413–438, 2000 ). Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Vlad Mares & Jeroen Swinkels, 2014. "Comparing first and second price auctions with asymmetric bidders," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(3), pages 487-514, August.
    • Handle: RePEc:spr:jogath:v:43:y:2014:i:3:p:487-514
    DOI: 10.1007/s00182-013-0392-8
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    Cited by:

    1. Javier Castro & Rosa Espínola & Inmaculada Gutiérrez & Daniel Gómez, 2023. "Auctions: A New Method for Selling Objects with Bimodal Density Functions," Computational Economics, Springer;Society for Computational Economics, vol. 61(4), pages 1707-1743, April.
    2. Patrick Hummel & R. Preston McAfee & Sergei Vassilvitskii, 2016. "Incentivizing advertiser networks to submit multiple bids," International Journal of Game Theory, Springer;Game Theory Society, vol. 45(4), pages 1031-1052, November.

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