Posted: 26 Jul 2001
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.
Suggested Citation: Suggested Citation
Maskin, Eric and Riley, John G., Asymmetric Auctions. The Review of Economic Studies, Vol. 67, Iss. 3, July 2000 . Available at SSRN: https://ssrn.com/abstract=239258