Competing auctions: finite markets and convergence

Artikel

The literature on competing auctions offers a model where sellers compete for buyers by setting reserve prices freely. An important outstanding conjecture (e.g. Peters and Severinov (1997)) is that the sellers post prices close to their marginal costs when the market becomes large. This conjecture is confirmed in this paper. More precisely, we show that if all sellers have zero costs, then the equilibrium reserve price converges to 0 in distribution. I also show that if there is a high enough lower bound on the buyers’ valuations, then there is a symmetric pure strategy equilibrium. In this equilibrium, if the number of buyers (sellers) increases, then the equilibrium reserve price increases (decreases) and the reserve price is decreasing in the size of the market.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Theoretical Economics ; ISSN: 1555-7561 ; Volume: 5 ; Year: 2010 ; Issue: 2 ; Pages: 241-274 ; New Haven, CT: The Econometric Society

Classification and Topics

• Classification: Wirtschaft ; Auctions ; Asymmetric and Private Information; Mechanism Design ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
• Subject: Competing auctions ; finite markets ; convergence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Virág, Gábor
• Event: Veröffentlichung
• (who): The Econometric Society
• (where): New Haven, CT
• (when): 2010

Further information

• DOI: doi:10.3982/TE538
• Handle: http://hdl.handle.net/10419/150138
• Last update: 10.03.2025, 11:46 AM CET