Citation

Discussion Paper Details

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Title: On Second Price Auctions and Imperfect Competition

Author(s): Patrick W. Schmitz

Publication Date: February 2003

Keyword(s): auctions, duopoly, private information and selling mechanisms

Programme Area(s): Industrial Organization

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 sellers 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 total surplus.

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Bibliographic Reference

Schmitz, P. 2003. 'On Second Price Auctions and Imperfect Competition'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3774