Using Bidder Asymmetry to Increase Seller Revenue

9 Pages Posted: 18 Jul 2002

See all articles by Paul Povel

Paul Povel

University of Houston - Department of Finance, C.T. Bauer College of Business

Rajdeep Singh

University of Minnesota - Twin Cities - Carlson School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: November 2003

Abstract

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

Povel, Paul and Singh, Rajdeep, Using Bidder Asymmetry to Increase Seller Revenue (November 2003). Available at SSRN: https://ssrn.com/abstract=315419 or http://dx.doi.org/10.2139/ssrn.315419

Paul Povel (Contact Author)

University of Houston - Department of Finance, C.T. Bauer College of Business ( email )

University of Houston
334 Melcher Hall
Houston, TX 77204
United States
713-743-4759 (Phone)

HOME PAGE: http://www.bauer.uh.edu/povel

Rajdeep Singh

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States
612-624-1061 (Phone)
612-626-1335 (Fax)

HOME PAGE: http://umn.edu/~rajsingh

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