Auctions with options for re-auction
Autor(a) principal: | |
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Data de Publicação: | 2003 |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Institucional do FGV (FGV Repositório Digital) |
Texto Completo: | http://hdl.handle.net/10438/12566 |
Resumo: | We examine the role of seller bidding and reserve prices in an infinitely repeated independent-private-value (IPV) ascending-price auction. The seller has a single object that she values at zero. At the end of any auction round, she may either sell to the highest bidder or pass-in the object and hold a new auction next period. New bidders are drawn randomly in each round. The ability to re-auction motivates a notion of reserve price as the option value of retaining the object for re-auctioning. Even in the absence of a mechanism with which to commit to a reserve price, the optimal 'secret' reserve is shown to exceed zero. However, despite the infinite repetition, there may be significant value to the seller from a binding reserve price commitment: the optimal binding reserve is higher than the optimal 'secret' reserve, and may be substantially so, even with very patient players. Furthermore, reserve price commitments may even be socially preferable at high discount factors. We also show that the optimal 'phantom' bidding strategy for the seller is revenue-equivalent to a commitment to an optimal public reserve price. |
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Menezes, Flavio MarquesEscolas::EPGEFGV2014-11-24T13:15:58Z2014-11-24T13:15:58Z2003-01-23http://hdl.handle.net/10438/12566We examine the role of seller bidding and reserve prices in an infinitely repeated independent-private-value (IPV) ascending-price auction. The seller has a single object that she values at zero. At the end of any auction round, she may either sell to the highest bidder or pass-in the object and hold a new auction next period. New bidders are drawn randomly in each round. The ability to re-auction motivates a notion of reserve price as the option value of retaining the object for re-auctioning. Even in the absence of a mechanism with which to commit to a reserve price, the optimal 'secret' reserve is shown to exceed zero. However, despite the infinite repetition, there may be significant value to the seller from a binding reserve price commitment: the optimal binding reserve is higher than the optimal 'secret' reserve, and may be substantially so, even with very patient players. Furthermore, reserve price commitments may even be socially preferable at high discount factors. We also show that the optimal 'phantom' bidding strategy for the seller is revenue-equivalent to a commitment to an optimal public reserve price.engEscola de Pós-Graduação em Economia da FGVSeminários de pesquisa econômica da EPGETodo cuidado foi dispensado para respeitar os direitos autorais deste trabalho. Entretanto, caso esta obra aqui depositada seja protegida por direitos autorais externos a esta instituição, contamos com a compreensão do autor e solicitamos que o mesmo faça contato através do Fale Conosco para que possamos tomar as providências cabíveisinfo:eu-repo/semantics/openAccessphantom bidding, re-auction option, reserve price, internet auctions.EconomiaLeilõesAuctions with options for re-auctioninfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articlereponame:Repositório Institucional do FGV (FGV Repositório Digital)instname:Fundação Getulio Vargas (FGV)instacron:FGVORIGINAL1122.pdf1122.pdfapplication/pdf505869https://repositorio.fgv.br/bitstreams/078d182b-7104-47d6-a324-98dbfdf72dd8/downloadef5c81aad8ee8d001e5d6cc78b29234aMD51LICENSElicense.txtlicense.txttext/plain; charset=utf-84707https://repositorio.fgv.br/bitstreams/e97d2a54-5d6d-4c3b-96bb-cae2f8744f87/downloaddfb340242cced38a6cca06c627998fa1MD52TEXT1122.pdf.txt1122.pdf.txtExtracted 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dc.title.eng.fl_str_mv |
Auctions with options for re-auction |
title |
Auctions with options for re-auction |
spellingShingle |
Auctions with options for re-auction Menezes, Flavio Marques phantom bidding, re-auction option, reserve price, internet auctions. Economia Leilões |
title_short |
Auctions with options for re-auction |
title_full |
Auctions with options for re-auction |
title_fullStr |
Auctions with options for re-auction |
title_full_unstemmed |
Auctions with options for re-auction |
title_sort |
Auctions with options for re-auction |
author |
Menezes, Flavio Marques |
author_facet |
Menezes, Flavio Marques |
author_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 |
dc.subject.por.fl_str_mv |
phantom bidding, re-auction option, reserve price, internet auctions. |
topic |
phantom bidding, re-auction option, reserve price, internet auctions. Economia Leilões |
dc.subject.area.por.fl_str_mv |
Economia |
dc.subject.bibliodata.por.fl_str_mv |
Leilões |
description |
We examine the role of seller bidding and reserve prices in an infinitely repeated independent-private-value (IPV) ascending-price auction. The seller has a single object that she values at zero. At the end of any auction round, she may either sell to the highest bidder or pass-in the object and hold a new auction next period. New bidders are drawn randomly in each round. The ability to re-auction motivates a notion of reserve price as the option value of retaining the object for re-auctioning. Even in the absence of a mechanism with which to commit to a reserve price, the optimal 'secret' reserve is shown to exceed zero. However, despite the infinite repetition, there may be significant value to the seller from a binding reserve price commitment: the optimal binding reserve is higher than the optimal 'secret' reserve, and may be substantially so, even with very patient players. Furthermore, reserve price commitments may even be socially preferable at high discount factors. We also show that the optimal 'phantom' bidding strategy for the seller is revenue-equivalent to a commitment to an optimal public reserve price. |
publishDate |
2003 |
dc.date.issued.fl_str_mv |
2003-01-23 |
dc.date.accessioned.fl_str_mv |
2014-11-24T13:15:58Z |
dc.date.available.fl_str_mv |
2014-11-24T13:15:58Z |
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http://hdl.handle.net/10438/12566 |
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eng |
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Seminários de pesquisa econômica da EPGE |
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openAccess |
dc.publisher.none.fl_str_mv |
Escola de Pós-Graduação em Economia da FGV |
publisher.none.fl_str_mv |
Escola de Pós-Graduação em Economia da FGV |
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reponame:Repositório Institucional do FGV (FGV Repositório Digital) instname:Fundação Getulio Vargas (FGV) instacron:FGV |
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