Asymmetric first-price auctions – A perturbation approach

Asymmetric first-price auctions – A perturbation approach

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Article ID: iaor20071542
Country: United States
Volume: 28
Issue: 4
Start Page Number: 836
End Page Number: 852
Publication Date: Nov 2003
Journal: Mathematics of Operations Research
Authors: ,
Keywords: auctions
Abstract:

We use perturbation analysis to obtain explicit approximations of the equilibrium bids in asymmetric first-price auctions with n bidders, in which bidders' valuations are independently drawn from different distribution functions. Several applications are presented: explicit approximations of the seller's expected revenue, the maximal bid, the optimal reserve price, inefficiency, and a consequence of stochastic dominance. We also suggest an improved numerical method for calculating the seller's expected revenue.

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