Auction Platform Design and the Linkage Principle

25 Pages Posted: 7 Jun 2016

See all articles by Wataru Tamura

Wataru Tamura

Nagoya University - Graduate School of Economics

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Date Written: June 2016

Abstract

This paper examines an auction platform in which the monopoly platform maximizes profits by adjusting participation fees and choosing an auction format. The seller has private information on the quality of the good, and each participating buyer receives a private signal about his valuation of the good. The choice of auction format determines the allocation of trading surplus between the seller and buyers. This paper shows that when the seller's type is affiliated with the buyers' signals, the platform can charge higher participation fees on both sides by choosing a first‐price or descending auction than a second‐price or ascending auction.

Suggested Citation

Tamura, Wataru, Auction Platform Design and the Linkage Principle (June 2016). The Journal of Industrial Economics, Vol. 64, Issue 2, pp. 201-225, 2016, Available at SSRN: https://ssrn.com/abstract=2791216 or http://dx.doi.org/10.1111/joie.12101

Wataru Tamura (Contact Author)

Nagoya University - Graduate School of Economics ( email )

1 Furo-cho
Chikusa-ku
Nagoya, 464-8601
Japan

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