Participation and welfare in auctions with default

Joosung Lee; Daniel Li

doi:10.1016/j.econlet.2019.108620

Participation and welfare in auctions with default

Joosung Lee, Daniel Li

Research output: Contribution to journal › Article › peer-review

Abstract / Description of output

In an auction with costly participation, we show that bidder default may cause social welfare loss through (i) the possibility of no trade and (ii) the under participation of bidders in equilibrium. We also provide closed-form solutions to the model.

Original language	English
Article number	108620
Journal	Economics Letters
Volume	183
Early online date	14 Aug 2019
DOIs	https://doi.org/10.1016/j.econlet.2019.108620
Publication status	Published - Oct 2019

Keywords / Materials (for Non-textual outputs)

auctions
default
participation cost
welfare loss

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10.1016/j.econlet.2019.108620

LeeLiEL2019ParticipationAndWelfareAccepted author manuscript, 253 KBLicence: Creative Commons: Attribution-NonCommercial-NoDerivatives (CC BY-NC-ND)

Cite this

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title = "Participation and welfare in auctions with default",

abstract = "In an auction with costly participation, we show that bidder default may cause social welfare loss through (i) the possibility of no trade and (ii) the under participation of bidders in equilibrium. We also provide closed-form solutions to the model.",

keywords = "auctions, default, participation cost, welfare loss",

author = "Joosung Lee and Daniel Li",

year = "2019",

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doi = "10.1016/j.econlet.2019.108620",

language = "English",

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AU - Lee, Joosung

AU - Li, Daniel

PY - 2019/10

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N2 - In an auction with costly participation, we show that bidder default may cause social welfare loss through (i) the possibility of no trade and (ii) the under participation of bidders in equilibrium. We also provide closed-form solutions to the model.

AB - In an auction with costly participation, we show that bidder default may cause social welfare loss through (i) the possibility of no trade and (ii) the under participation of bidders in equilibrium. We also provide closed-form solutions to the model.

KW - auctions

KW - default

KW - participation cost

KW - welfare loss

U2 - 10.1016/j.econlet.2019.108620

DO - 10.1016/j.econlet.2019.108620

M3 - Article

SN - 0165-1765

VL - 183

JO - Economics Letters

JF - Economics Letters

M1 - 108620

ER -

Participation and welfare in auctions with default

Abstract / Description of output

Keywords / Materials (for Non-textual outputs)

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