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On asymmetric reserve prices

Author

Listed:
  • Kotowski, Maciej H.

    (John F. Kennedy School of Government, Harvard University)

Abstract
We investigate equilibrium bidding in first-price auctions with asymmetric reserve prices. For example, the auctioneer may set a low reserve price for one subset of bidders and a high reserve price for others. When used to pursue a distributional objective, lowering the reserve price for some bidders channels benefits toward marginal agents in the favored group and does not adversely impact non-favored bidders whose reserve price is unchanged. Even in symmetric environments, when the valuation distribution is not regular, introducing asymmetric reserve prices can increase the auctioneer's revenue compared to an optimal common reserve price. Implications for auction design are considered.

Suggested Citation

  • Kotowski, Maciej H., 2018. "On asymmetric reserve prices," Theoretical Economics, Econometric Society, vol. 13(1), January.
    • Handle: RePEc:the:publsh:1824
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    References listed on IDEAS

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    Cited by:

    1. Banerjee, Shraman, 2021. "Treating Symmetric Buyers Asymmetrically," MPRA Paper 105971, University Library of Munich, Germany.
    2. Zhe Chen, 2021. "The multidimensional procurement auctions with reference‐based utility," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 319-325, March.
    3. Burguet, Roberto & Sákovics, József, 2019. "Personalized prices and uncertainty in monopsony," International Journal of Industrial Organization, Elsevier, vol. 67(C).
    4. Shraman Banerjee, 2024. "Treating symmetric buyers asymmetrically," International Journal of Economic Theory, The International Society for Economic Theory, vol. 20(2), pages 159-181, June.
    5. Kirkegaard, René, 2022. "Efficiency in asymmetric auctions with endogenous reserve prices," Games and Economic Behavior, Elsevier, vol. 132(C), pages 234-239.

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    More about this item

    Keywords

    First-price auction; asymmetric auctions; reserve price; mechanism design; affirmative action; procurement;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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