Princeton University - Department of Economics; Harvard University - Department of Economics; Massachusetts Institute of Technology (MIT) - Department of Economics
John G. Riley
affiliation not provided to SSRN
The Review of Economic Studies, Vol. 67, Iss. 3, July 2000
The revenue-equivalence theorm for auctions predicts that expected seller revenue is independent of the bidding rules, as long as equilibrium has the properties that the buyer with the highest reservation price wins and any buyer with the lowest possible reservation price has zero expected surplus. Thus, in particular, the two most common auction institutions-the open 'English' and the sealed high-bid auction-are equivalent despite their rather different strategic properties.
Date posted: July 26, 2001