Bidding among friends and enemies with symmetric information
Ettinger, David (2010), Bidding among friends and enemies with symmetric information, JITE : Journal of Institutional and Theoretical Economics, 166, 2, p. 365-385. http://dx.doi.org/10.1628/093245610791342996
TypeArticle accepté pour publication ou publié
Journal nameJITE : Journal of Institutional and Theoretical Economics
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Abstract (EN)We consider an auction setting, in a symmetric information framework, in which bidders, even if they fail to obtain the good, care about the price paid by the winner. We prove that the outcome of the first-price auction is not affected by identity-independent price externalities, while the outcome of the second-price auction is. In contrast, identity-dependent price externalities affect the outcome of both auction formats. In any case, the second-price auction exacerbates the effects of price externalities.
Subjects / KeywordsBudget-constraints; toeholds; externalities; allocation; revenue; auctions
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