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Manipulating information revelation with reserve prices
- 1.0525465 - NHU-C 2021 RIV FR eng J - Journal Article
Ettinger, D. - Michelucci, Fabio
Manipulating information revelation with reserve prices.
Annals of Economics and Statistics. Roč. 133, March (2019), s. 87-91. ISSN 2115-4430
Institutional support: Progres-Q24
Keywords : auctions * reserve price
OECD category: Economic Theory
Method of publishing: Limited access
https://doi.org/10.15609/annaeconstat2009.133.0087
We introduce a novel motive for the use of a reserve price as an instrument to raise auction revenues in ascending auctions. The effect that we stress is of inducing coarser information aggregation. The reserve price may prevent information revelation because bidders cannot precisely observe at which price other bidders leave the auction. In simple settings where valuation functions are not symmetric, this may increase the expected revenue of the auction. To illustrate this motive, we exhibit an example in which the use of a reserve price increases revenue even though there are always at least two bidders active for prices higher than the reserve price.
Permanent Link: http://hdl.handle.net/11104/0309597
Number of the records: 1