Abstract

http://ssrn.com/abstract=2056157
 
 

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Reserve Price When Bidders are Asymmetric


Hikmet Gunay


University of Manitoba

Xin Meng


Southwestern University of Finance and Economics (SWUFE)

Mark Nagelberg


affiliation not provided to SSRN

May 11, 2012


Abstract:     
We analyze the optimal reserve price in a second price auction when there are $N$ types of bidders whose valuations are drawn from different distribution functions. The seller cannot determine the specific type of each bidder. First, we show that the number of bidders affects the reserve price. Second, we give the sufficient conditions for the uniqueness of the optimal reserve price. Third, we find that if a bidder is replaced by a stronger bidder, the optimal reserve price may decrease. Finally, we give sufficient conditions that ensure the seller will not use a reserve price; hence, the auction will be efficient.

Number of Pages in PDF File: 17

Keywords: Reserve Price, Reservation Price, Asymmetric Bidders

JEL Classification: D44

working papers series


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Date posted: May 13, 2012  

Suggested Citation

Gunay, Hikmet and Meng, Xin and Nagelberg, Mark, Reserve Price When Bidders are Asymmetric (May 11, 2012). Available at SSRN: http://ssrn.com/abstract=2056157 or http://dx.doi.org/10.2139/ssrn.2056157

Contact Information

Hikmet Gunay (Contact Author)
University of Manitoba ( email )
Economics
Winnipeg R3T 5V5, Manitoba
Canada
Xin Meng
Southwestern University of Finance and Economics (SWUFE) ( email )
55 Guanghuacun St,
Chengdu, Sichuan 610074
China
Mark Nagelberg
affiliation not provided to SSRN ( email )
Feedback to SSRN


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Citations:  1
Footnotes:  17

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