DP4080 Auctions with Private Entry Costs
|Author(s):||Todd Kaplan, Aner Sela|
|Publication Date:||October 2003|
|Keyword(s):||asymmetric auctions, entry costs, symmetric auctions|
|JEL(s):||D44, O31, O32|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=4080|
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.