In the basic auction model, the optimal reserve price may depend on the number of bidders

A-Tier
Journal: Journal of Economic Theory
Year: 2021
Volume: 198
Issue: C

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A widespread claim in the auction literature about the most well known auction setting with i.i.d. private values is that the optimal reserve price for a second price auction is independent of the number n of bidders. This is indeed the case if the virtual valuation function is increasing, but this result fails to hold if the virtual valuation is non-monotone. In such case the optimal reserve price is weakly increasing in n and, as n tends to infinity, it tends to the highest regular valuation with zero virtual value.

Technical Details

RePEc Handle
repec:eee:jetheo:v:198:y:2021:i:c:s0022053121001885
Journal Field
Theory
Author Count
1
Added to Database
2026-01-26