Near-optimality of second price mechanisms in a class of asymmetric auctions

Vlad Mares, Jeroen M. Swinkels*

*Corresponding author for this work

Research output: Contribution to journalArticle

6 Scopus citations


Consider a setting with n sellers having i.i.d. costs with log-concave density f from cumulative F, and a buyer who puts a premium Δi on procuring from seller i. We show how for any given Δ1,...,Δn, a simple second price bonus auction can be chosen which comes surprisingly close to giving the auctioneer the same surplus as an optimal mechanism. The bonuses depend only on the magnitude and monotonicity of the slope of virtual costs given F. We show that these in turn depend only on fairly coarse information about F. We explore how this result generalizes to asymmetrically distributed costs.

Original languageEnglish (US)
Pages (from-to)218-241
Number of pages24
JournalGames and Economic Behavior
Issue number1
StatePublished - May 1 2011


  • Asymmetric auctions
  • Mechanism design
  • Procurement
  • Rho-concavity
  • Second price auctions

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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