Auctions with Dynamic Populations: Efficiency and Revenue Maximization
Washington University in Saint Louis - John M. Olin Business School
April 10, 2012
Journal of Economic Theory, 147(6), 2419-2438
A seller has an uncertain number of perishable goods to sell in each period. Privately informed buyers arrive stochastically to the market. Buyers are risk neutral, patient, and have persistent private values for consuming a single unit. We show that the seller can implement the efficient allocation using a sequence of ascending auctions. The buyers use memoryless strategies to reveal all private information in every period, inducing symmetric behavior across different cohorts. We extend our results to revenue maximization, showing that a sequence of ascending auctions with asynchronous price clocks is an optimal mechanism.
Number of Pages in PDF File: 21
Keywords: Dynamic mechanism design, Indirect mechanisms, Sequential ascending auctions, Sequential allocation, Random arrivals
JEL Classification: C73, D44, D82, D83Accepted Paper Series
Date posted: November 7, 2008 ; Last revised: May 5, 2013
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