Ranking Asymmetric Auctions

Posted: 3 Dec 2010 Last revised: 16 Sep 2014

Arieh Gavious

Ono Academic College; Ben-Gurion University of the Negev - Department of Industrial Engineering and Management

Yizhaq Minchuk

Shamoon College of Engineering

Date Written: Juen 1, 2011

Abstract

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

Gavious, Arieh and Minchuk, Yizhaq, Ranking Asymmetric Auctions (Juen 1, 2011). Available at SSRN: https://ssrn.com/abstract=1717976 or http://dx.doi.org/10.2139/ssrn.1717976

Arieh Gavious (Contact Author)

Ono Academic College ( email )

Kyriat Ono
Israel

Ben-Gurion University of the Negev - Department of Industrial Engineering and Management ( email )

Beer-Sheva 84105
Israel

Yizhaq Minchuk

Shamoon College of Engineering ( email )

Basel street
Beer-Sheva, 84100
Israel

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