Synergies and price trends in sequential auctions
Autor(a) principal: | |
---|---|
Data de Publicação: | 1999 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Institucional do FGV (FGV Repositório Digital) |
Texto Completo: | http://hdl.handle.net/10438/390 |
Resumo: | In this paper we consider sequential auctions where an individual’s value for a bundle of objects is either greater than the sum of the values for the objects separately (positive synergy) or less than the sum (negative synergy). We show that the existence of positive synergies implies declining expected prices. When synergies are negative, expected prices are increasing. There are several corollaries. First, the seller is indi¤erent between selling the objects simultaneously as a bundle or sequentially when synergies are positive. Second, when synergies are negative, the expected revenue generated by the simultaneous auction can be larger or smaller than the expected revenue generated by the sequential auction. In addition, in the presence of positive synergies, an option to buy the additional object at the price of the …rst object is never exercised in the symmetric equilibrium and the seller’s revenue is unchanged. Under negative synergies, in contrast, if there is an equilibrium where the option is never exercised, then equilibrium prices may either increase or decrease and, therefore, the net e¤ect on the seller’s revenue of the introduction of an option is ambiguous. Finally, we examine two special cases with asymmetric players. In the …rst case, players have distinct synergies. In this example, even if one player has positive synergies and the other has negative synergies, it is still possible for expected prices to decline. In the second case, one player wants two objects and the remaining players want one object each. For this example, we show that expected prices may not necessarily decrease as predicted by Branco (1997). The reason is that players with singleunit demand will generally bid less than their true valuations in the …rst period. Therefore, there are two opposing forces; the reduction in the bid of the player with multiple-demand in the last auction and less aggressive bidding in the …rst auction by the players with single-unit demand. |
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Menezes, Flavio MarquesMonteiro, P. K.Escolas::EPGEFGV2008-05-13T15:23:22Z2010-09-23T18:58:22Z2008-05-13T15:23:22Z2010-09-23T18:58:22Z1999-10-010104-8910http://hdl.handle.net/10438/390In this paper we consider sequential auctions where an individual’s value for a bundle of objects is either greater than the sum of the values for the objects separately (positive synergy) or less than the sum (negative synergy). We show that the existence of positive synergies implies declining expected prices. When synergies are negative, expected prices are increasing. There are several corollaries. First, the seller is indi¤erent between selling the objects simultaneously as a bundle or sequentially when synergies are positive. Second, when synergies are negative, the expected revenue generated by the simultaneous auction can be larger or smaller than the expected revenue generated by the sequential auction. In addition, in the presence of positive synergies, an option to buy the additional object at the price of the …rst object is never exercised in the symmetric equilibrium and the seller’s revenue is unchanged. Under negative synergies, in contrast, if there is an equilibrium where the option is never exercised, then equilibrium prices may either increase or decrease and, therefore, the net e¤ect on the seller’s revenue of the introduction of an option is ambiguous. Finally, we examine two special cases with asymmetric players. In the …rst case, players have distinct synergies. In this example, even if one player has positive synergies and the other has negative synergies, it is still possible for expected prices to decline. In the second case, one player wants two objects and the remaining players want one object each. For this example, we show that expected prices may not necessarily decrease as predicted by Branco (1997). The reason is that players with singleunit demand will generally bid less than their true valuations in the …rst period. Therefore, there are two opposing forces; the reduction in the bid of the player with multiple-demand in the last auction and less aggressive bidding in the …rst auction by the players with single-unit demand.engFundação Getulio Vargas. Escola de Pós-graduação em EconomiaEnsaios Econômicos;360SynergiesSequential auctionsIncreasing and decreasing expected pricesEconomiaEconomiaLeilões - Modelos econômicosSynergies and price trends in sequential auctionsinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articlereponame:Repositório Institucional do FGV (FGV Repositório Digital)instname:Fundação Getulio Vargas (FGV)instacron:FGVinfo:eu-repo/semantics/openAccessTHUMBNAIL1208.pdf.jpg1208.pdf.jpgGenerated Thumbnailimage/jpeg4233https://repositorio.fgv.br/bitstreams/cef4c96b-4a6d-49e2-9001-ce6db968bbe1/download957381a97f799bee36d8899fe73ee5bbMD58ORIGINAL1208.pdfapplication/pdf329277https://repositorio.fgv.br/bitstreams/19ca4303-969e-4d45-adaf-42b28026fc6e/downloadaab9072a21f2bd0be43bae6644b5c1fcMD52TEXT1208.pdf.txt1208.pdf.txtExtracted texttext/plain40150https://repositorio.fgv.br/bitstreams/885f3f1e-c719-4a9b-9435-14ea075b9587/downloadbeb7a44a9e18be2121735299b76fa5b1MD5710438/3902023-11-08 23:41:59.96open.accessoai:repositorio.fgv.br:10438/390https://repositorio.fgv.brRepositório InstitucionalPRIhttp://bibliotecadigital.fgv.br/dspace-oai/requestopendoar:39742023-11-08T23:41:59Repositório Institucional do FGV (FGV Repositório Digital) - Fundação Getulio Vargas (FGV)false |
dc.title.eng.fl_str_mv |
Synergies and price trends in sequential auctions |
title |
Synergies and price trends in sequential auctions |
spellingShingle |
Synergies and price trends in sequential auctions Menezes, Flavio Marques Synergies Sequential auctions Increasing and decreasing expected prices Economia Economia Leilões - Modelos econômicos |
title_short |
Synergies and price trends in sequential auctions |
title_full |
Synergies and price trends in sequential auctions |
title_fullStr |
Synergies and price trends in sequential auctions |
title_full_unstemmed |
Synergies and price trends in sequential auctions |
title_sort |
Synergies and price trends in sequential auctions |
author |
Menezes, Flavio Marques |
author_facet |
Menezes, Flavio Marques Monteiro, P. K. |
author_role |
author |
author2 |
Monteiro, P. K. |
author2_role |
author |
dc.contributor.unidadefgv.por.fl_str_mv |
Escolas::EPGE |
dc.contributor.affiliation.none.fl_str_mv |
FGV |
dc.contributor.author.fl_str_mv |
Menezes, Flavio Marques Monteiro, P. K. |
dc.subject.eng.fl_str_mv |
Synergies Sequential auctions |
topic |
Synergies Sequential auctions Increasing and decreasing expected prices Economia Economia Leilões - Modelos econômicos |
dc.subject.por.fl_str_mv |
Increasing and decreasing expected prices |
dc.subject.area.por.fl_str_mv |
Economia |
dc.subject.bibliodata.por.fl_str_mv |
Economia Leilões - Modelos econômicos |
description |
In this paper we consider sequential auctions where an individual’s value for a bundle of objects is either greater than the sum of the values for the objects separately (positive synergy) or less than the sum (negative synergy). We show that the existence of positive synergies implies declining expected prices. When synergies are negative, expected prices are increasing. There are several corollaries. First, the seller is indi¤erent between selling the objects simultaneously as a bundle or sequentially when synergies are positive. Second, when synergies are negative, the expected revenue generated by the simultaneous auction can be larger or smaller than the expected revenue generated by the sequential auction. In addition, in the presence of positive synergies, an option to buy the additional object at the price of the …rst object is never exercised in the symmetric equilibrium and the seller’s revenue is unchanged. Under negative synergies, in contrast, if there is an equilibrium where the option is never exercised, then equilibrium prices may either increase or decrease and, therefore, the net e¤ect on the seller’s revenue of the introduction of an option is ambiguous. Finally, we examine two special cases with asymmetric players. In the …rst case, players have distinct synergies. In this example, even if one player has positive synergies and the other has negative synergies, it is still possible for expected prices to decline. In the second case, one player wants two objects and the remaining players want one object each. For this example, we show that expected prices may not necessarily decrease as predicted by Branco (1997). The reason is that players with singleunit demand will generally bid less than their true valuations in the …rst period. Therefore, there are two opposing forces; the reduction in the bid of the player with multiple-demand in the last auction and less aggressive bidding in the …rst auction by the players with single-unit demand. |
publishDate |
1999 |
dc.date.issued.fl_str_mv |
1999-10-01 |
dc.date.accessioned.fl_str_mv |
2008-05-13T15:23:22Z 2010-09-23T18:58:22Z |
dc.date.available.fl_str_mv |
2008-05-13T15:23:22Z 2010-09-23T18:58:22Z |
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info:eu-repo/semantics/publishedVersion |
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info:eu-repo/semantics/article |
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http://hdl.handle.net/10438/390 |
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0104-8910 |
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0104-8910 |
url |
http://hdl.handle.net/10438/390 |
dc.language.iso.fl_str_mv |
eng |
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eng |
dc.relation.ispartofseries.por.fl_str_mv |
Ensaios Econômicos;360 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.publisher.none.fl_str_mv |
Fundação Getulio Vargas. Escola de Pós-graduação em Economia |
publisher.none.fl_str_mv |
Fundação Getulio Vargas. Escola de Pós-graduação em Economia |
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