Second-Price Auctions with Private Entry Costs
Todd R. Kaplan
University of Exeter Business School - Department of Economics; University of Haifa - Department of Economics
Ben-Gurion University of the Negev - Department of Economics; Centre for Economic Policy Research (CEPR)
September 20, 2006
We study asymmetric second-price auctions under incomplete information. The bidders have potentially different, commonly-known, valuations for the object and private information about their entry costs. The seller, however, does not benefit from these entry costs. We calculate the equilibrium strategies of the bidders and analyze the optimal design for the seller in this environment.
Number of Pages in PDF File: 21
Keywords: Symmetric auctions, Asymmetric auctions, Entry costs
JEL Classification: D44, O31, O32
Date posted: October 11, 2003
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