On Second Price Auctions and Imperfect Competition

Posted: 30 Apr 2004

See all articles by Patrick W. Schmitz

Patrick W. Schmitz

University of Cologne; Centre for Economic Policy Research (CEPR)

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Abstract

Consider two sellers each of whom has one unit of an indivisible good and two buyers each of whom is interested in buying one unit. The sellers simultaneously set reserve prices and use second price auctions as rationing device. An equilibrium in pure strategies where each seller has a regular customer is characterized. The result is applied in order to demonstrate that not allowing sellers to use second price auctions may enhance the total surplus.

Keywords: Auctions, Duopoly, Selling mechanisms, Private information

JEL Classification: D43, D44, D82

Suggested Citation

Schmitz, Patrick W., On Second Price Auctions and Imperfect Competition. Journal of Mathematical Economics, Vol. 39, No. 8, pp. 901-909, 2003. Available at SSRN: https://ssrn.com/abstract=537102

Patrick W. Schmitz (Contact Author)

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

HOME PAGE: http://schmitz.uni-koeln.de/index.php?s=mitarbeiter&t=schmitz

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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