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Optimal Auctions with Endogenous Entry
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Lixin Ye
Published/Copyright:
October 28, 2004
We consider a single object, independent private value auction model with entry. Potential bidders are ex ante symmetric and randomize about entry. After entry, each bidder incurs a cost, then learns her private value and a set of signals that may lead to updated beliefs about other entrants' valuations. It is shown that the Vickrey auction with free entry maximizes the expected revenue. Furthermore, if the information potentially available to bidders after entry is sufficiently rich, then the Vickrey auction, up to its equivalent class, is also the only optimal sealed-bid auction.
Published Online: 2004-10-28
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Keywords for this article
Auctions;
Vickrey auction;
robust mechanism design;
efficient entry;
complete classes
Articles in the same Issue
- Advances Article
- Policy Advice with Imperfectly Informed Experts
- Backward Induction and Model Deterioration
- Contributions Article
- Search and Bargaining in Large Markets With Homogeneous Traders
- To Make or Buy: An Allocation of Attention
- A Simple Inducement Scheme to Overcome Adoption Externalities
- Optimal Dynamic Portfolio Risk with First-Order and Second-Order Predictability
- Uniform Proofs of Order Independence for Various Strategy Elimination Procedures
- Players With Limited Memory
- Precedents and Timing: A Strategic Analysis of Multi-Plaintiff Litigation
- Optimal Auctions with Endogenous Entry
- Topics Article
- Multiple-Object Auctions Around a Circle
- Market Size and Vertical Equilibrium in the Context of Successive Cournot Oligopolies
- Trade and Linked Exchange; Price Discrimination Through Transaction Bundling
- A Sequential Signaling Model of the Sale of an Invention to an Oligopolist
- Vertical Differentiation, Asymmetric Information and Endogenous Bank Screening
- Patent Renewal Fees and Self-Funding Patent Offices
- Imitation and Long Run Outcomes
- Counterfactual Reasoning and Common Knowledge of Rationality in Normal Form Games
- Unraveling of Information: Competition and Uncertainty
- A Theory of Vague Expected Utility
- Sequential Decision-Making and Asymmetric Equilibria: An Application to Takeovers
