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Sequential Auctions with Endogenously Determined Reserve Prices

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Listed:
  • Rasim Ozcan

    (Boston College)

Abstract

This paper models an auction game in which two identical licenses for participating in an oligopolistic market are sold in a sequential auction. There is no incumbent. The auction for the first license is a standard first-price, sealed-bid type with an exogenously set reserve price, while the second uses the price of the first unit as the reserve price. This auction rule mimics the license auction for the Turkish Global Mobile Telecommunications in 2000. For some parameter values of the model, this auction setup generates less or equal revenue as selling the monopoly right with the second-price, sealed-bid auction. However, for other parameter values, the seller may get higher revenues.

Suggested Citation

  • Rasim Ozcan, 2004. "Sequential Auctions with Endogenously Determined Reserve Prices," Boston College Working Papers in Economics 592, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:592
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    File URL: http://fmwww.bc.edu/EC-P/wp592.pdf
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    References listed on IDEAS

    as
    1. Gerard J. van den Berg & Jan C. van Ours & Menno P. Pradhan, 2001. "The Declining Price Anomaly in Dutch Dutch Rose Auctions," American Economic Review, American Economic Association, vol. 91(4), pages 1055-1062, September.
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    5. Cristina Mazón & Soledad Núñez, 1999. "On the Optimality of Treasury Bond Auctions: The Spanish Case," Working Papers 9905, Banco de España.
    6. Philippe Jehiel & Benny Moldovanu, 2000. "Auctions with Downstream Interaction Among Buyers," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 768-791, Winter.
    7. repec:bla:jindec:v:45:y:1997:i:3:p:227-44 is not listed on IDEAS
    8. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer.
    9. von der Fehr, Nils-Henrik Morch, 1994. "Predatory Bidding in Sequential Auctions," Oxford Economic Papers, Oxford University Press, vol. 46(3), pages 345-356, July.
    10. McAfee, R. Preston & Vincent, Daniel, 1997. "Sequentially Optimal Auctions," Games and Economic Behavior, Elsevier, vol. 18(2), pages 246-276, February.
    11. Neil Gandal, 1997. "Sequential Auctions of Interdependent Objects: Israeli Cable Television Licenses," Journal of Industrial Economics, Wiley Blackwell, vol. 45(3), pages 227-244, September.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Hikmet Gunay & Xin Meng, 2007. "Predatory Bidding in Sequential Auctions," Economics Bulletin, AccessEcon, vol. 4(12), pages 1-5.
    2. Yan, Haomin, 2020. "Auctions with quantity externalities and endogenous supply," International Journal of Industrial Organization, Elsevier, vol. 71(C).
    3. repec:ebl:ecbull:v:4:y:2007:i:12:p:1-5 is not listed on IDEAS

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    More about this item

    Keywords

    Auctions; Sequential First-Price Auctions; Endogenous Reserve Prices;
    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
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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