A Theory of Auctions with Endogenous Valuations

S-Tier
Journal: Journal of Political Economy
Year: 2021
Volume: 129
Issue: 4
Pages: 1011 - 1051

Authors (4)

Score contribution per author:

2.011 = (α=2.01 / 4 authors) × 4.0x S-tier

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

Abstract

We derive the symmetric, revenue-maximizing allocation of several units among agents who take costly actions that influence their values. The problem is equivalent to a reduced-form model where agents have nonexpected utility. The uniform-price auction and the discriminatory pay-your-bid auction with reserve prices that react to both demand and supply constitute symmetric, optimal mechanisms. We also identify a condition under which the overall optimal mechanism is indeed symmetric and illustrate the structure of the optimal asymmetric mechanism when the condition fails. The main tool in our analysis is an integral inequality based on Fan and Lorentz (1954).

Technical Details

RePEc Handle
repec:ucp:jpolec:doi:10.1086/712735
Journal Field
General
Author Count
4
Added to Database
2026-01-26