Posted: 3 Dec 2010 Last revised: 16 Sep 2014
Date Written: Juen 1, 2011
We compare the expected revenue in first- and second-price auctions with asymmetric bidders. We consider a "close to uniform" distributions with identical supports. In contrast to the common conjecture in the literature, we show that in the case of identical supports the expected revenue in second-price auction may exceed that in first-price auction. We also show that asymmetry over lower valuations has a higher negative impact on the expected revenue in first-price auction than in second-price auction. However, asymmetry over high valuations always increases the revenue in first-price auction.
Keywords: asymmetric auctions, ranking auctions, perturbation analysis, revenue equivalence
JEL Classification: D44, D72, D82
Suggested Citation: Suggested Citation