Using Bidder Asymmetry to Increase Seller Revenue
9 Pages Posted: 18 Jul 2002
Date Written: November 2003
This paper considers bidding environments with pure common values, in which bidders are not equally well informed. We construct the optimal selling mechanism and ask how bidder asymmetry affects the seller's expected payoff. With an optimal mechanism, the seller benefits from bidder asymmetry: her expected revenue increases if the bidders are more asymmetrically informed.
Keywords: Auctions, Common Value, Asymmetric Bidders
JEL Classification: D44, D82
Suggested Citation: Suggested Citation