Ranking asymmetric auctions: Filling the gap between a distributional shift and stretch

B-Tier
Journal: Games and Economic Behavior
Year: 2014
Volume: 85
Issue: C
Pages: 60-69

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

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

Abstract

I consider first-price auctions (FPA) and second-price auctions (SPA) with two asymmetric bidders. The FPA is known to be more profitable than the SPA if the strong bidder's distribution function is convex and the weak bidder's distribution is obtained by truncating or horizontally shifting the former. In this paper, I employ a new mechanism design result to show that the FPA remains optimal if the weak bidder's distribution falls between the two benchmarks in a natural way. The same conclusion holds if the strong bidder's distribution is concave, but with a vertical shift replacing the horizontal shift. A result with a similar flavor holds if the strong bidder's distribution is neither convex nor concave. The dispersive order and the star order prove useful in comparing the weak bidder's distribution to the benchmarks. A key step establishes a relationship between these orders and reverse hazard rate dominance.

Technical Details

RePEc Handle
repec:eee:gamebe:v:85:y:2014:i:c:p:60-69
Journal Field
Theory
Author Count
1
Added to Database
2026-01-25