Reserve Price when Bidders Are Asymmetric
11 Pages Posted: 25 Jul 2012 Last revised: 22 Mar 2017
Date Written: March 18, 2017
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 “distribution type” of each bidder. In this paper, we give sufficient conditions for the uniqueness of the optimal reserve price. Then, we give sufficient conditions that ensure the seller will not use a reserve price; hence, the auction will be efficient.
Keywords: Auction, Reserve (Reservation) Price, Asymmetric Bidders
JEL Classification: D44
Suggested Citation: Suggested Citation
Gunay, Hikmet and Meng, Xin and Nagelberg, Mark, Reserve Price when Bidders Are Asymmetric (March 18, 2017). ISER Discussion Paper No. 849, Available at SSRN: https://ssrn.com/abstract=2116915 or http://dx.doi.org/10.2139/ssrn.2116915
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