Reserve prices without commitment

R Burguet, J Sakovics

Research output: Contribution to journalArticlepeer-review

Abstract

When potential bidders in an auction have to incur a cost to prepare their bids and thus to learn their valuations, imposing a reserve price and announcing that in case no bid is submitted there will be another auction without a reserve price is both revenue and welfare improving. Reserve prices that induce less than maximum entry in the first auction may be optimal. Also, entry fees are not necessarily better instruments than reserve prices. (C) 1996 Academic Press, Inc.

Original languageEnglish
Pages (from-to)149-164
Number of pages16
JournalGames and Economic Behavior
Volume15
Issue number2
DOIs
Publication statusPublished - Aug 1996

Keywords

  • AUCTIONS
  • ENTRY
  • COSTS

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