Comparing first and second price auctions with asymmetric bidders

Vlad Mares*, Jeroen M. Swinkels

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

We study procurement auctions in which, as is common in practice, a group of sellers (incumbents, qualified bidders) is given an advantage, based, for example, on better reliability, quality, or incumbency status. We show conditions under which for any given first price handicap auction, there is a simple second-price design which dominates it. This generalizes a previous result for the case of an auction with one insider and one outsider (Mares and Swinkels in J Econ Theory, 2013) and sharpens our understanding of the classical result by Maskin and Riley (Rev Econ Stud 67:413-438, 2000).

Original languageEnglish (US)
Pages (from-to)487-514
Number of pages28
JournalInternational Journal of Game Theory
Volume43
Issue number3
DOIs
StatePublished - Aug 2014

Keywords

  • Asymmetric auctions
  • Differentiation
  • First price auctions
  • Mechanism design
  • Procurement
  • Request for proposal
  • Second price auctions

ASJC Scopus subject areas

  • Statistics and Probability
  • Mathematics (miscellaneous)
  • Social Sciences (miscellaneous)
  • Economics and Econometrics
  • Statistics, Probability and Uncertainty

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