Discussion Paper Details

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Title: Auctions with Private Entry Costs

Author(s): Todd Kaplan and Aner Sela

Publication Date: October 2003

Keyword(s): asymmetric auctions, entry costs and symmetric auctions

Programme Area(s): Industrial Organization

Abstract: We study auctions where bidders have private information about their entry costs and the seller does not benefit from these entry costs. We consider a symmetric environment where all bidders have the same value for the object being sold, and also an asymmetric environment where bidders may have different valuations for the object. In these environments, the seller?s pay-off as well as the social surplus may either increase or decrease in the number of bidders though not necessarily in the same direction. The auction designs that maximize the social surplus or the seller?s pay-off are analysed.

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Bibliographic Reference

Kaplan, T and Sela, A. 2003. 'Auctions with Private Entry Costs'. London, Centre for Economic Policy Research.