Auctions with heterogeneous entry costs

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dc.contributor.author Moreno, Diego
dc.contributor.author Wooders, John
dc.contributor.editor Universidad Carlos III de Madrid. Departamento de Economía
dc.date.accessioned 2008-04-22T10:40:01Z
dc.date.available 2008-04-22T10:40:01Z
dc.date.issued 2006-01
dc.identifier.issn 2340-5031
dc.identifier.uri http://hdl.handle.net/10016/2485
dc.description.abstract We study the impact of public and secret reserve prices in auctions where buyers have independent private values and heterogeneous entry costs. We find that in a standard auction the optimal (i.e., revenue maximizing) public reserve price is typically above the seller's value. Moreover, an appropriate entry fee together with a public reserve price equal to the seller's value generates greater revenue. Secret reserve prices, however, differ across auction formats. In a second-price sealed-bid auction the secret reserve price is above the optimal public reserve price; hence there is less entry, a smaller probability of sale, and both the seller revenue and the bidders' utility are less than with an optimal public reserve price. In contrast, in a first-price sealed-bid auction the secret reserve is equal to the seller's value, and the bidders' expected utility (seller revenue) is greater (less) than with an optimal public reserve price.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.language.iso eng
dc.relation.ispartofseries UC3M Working papers. Economics
dc.relation.ispartofseries 06-06
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.other Standard auctions
dc.subject.other Endogenous entry
dc.subject.other Heterogenous entry costs
dc.subject.other Public reserve
dc.subject.other Secret reserve
dc.title Auctions with heterogeneous entry costs
dc.type workingPaper
dc.type workingPaper
dc.subject.eciencia Economía
dc.rights.accessRights openAccess
dc.identifier.repec we061806
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