(In)efficiency of auctions with the asymmetry of rights
Languages of publication
The private entrepreneurs are not forced to limit themselves to the standard auction rules, and in case of the procurement auctions one can observe many hybrid or quasi-auction rules spontaneously introduced. The paper analyzes two of them, that are based on the common assumption: the second-best bidder is given an additional right to improve her initial bid, and therefore win the auction. The focus of the paper is on the analysis of price and allocative efficiency of such modifications, to determine whether they can serve as an alternative to the standard auction rules. Theoretical analyses, followed by the laboratory experiments, provide no proof for that conclusion though, as none of the rules under study beats the classical first-price sealed-bid auction.
- Andreoni, J., Che, Y.-K., Kim J., 2007. "Asymmetric information about rivals' types in standard auctions: an experiment", Games and Economic Behavior, Vol.59, No.2, pp.240-259, http://dx.doi.org/10.1016/j.geb.2006.09.003
- Cox, J. C., Roberson B., Smith V. L., 1982. "Theory and behavior of single object auctions", Research in Experimental Economics, Vol.2, JAI Press Inc, pp.1-43
- Cox, J. C., Smith, V. L., Walker J. M., 1988. "Theory and individual behavior of first-price auctions", Journal of Risk and Uncertainty, Vol.1, No.1, pp. 61-99, http://dx.doi.org/10.1007/BF00055565
- Fischbacher, U., 2007. "z-Tree: Zurich Toolbox for Ready-made Economic Experiments", Experimental Economics, Vol.10, No.2, pp. 171-178, http://dx.doi.org/10.1007/s10683-006-9159-4
- Kagel, J. H., Levin, D., 1993. "Independent private value auctions: bidder behavior in first-, second-, and third-price auctions with varying numbers of bidders", The Economic Journal, Vol.103, No.419, pp. 868-879, http://dx.doi.org/10.2307/2234706
- Kuśmierczyk, P., 2013. "Efektywność odwrotnych mechanizmów aukcyjnych i quasi-aukcyjnych", Publishing House of Wrocław University of Economics, Wrocław
- McAfee, P.R., McMillan, J., 1987. "Auctions with entry", Economics Letters, Vol.23, pp.343-347.
- Myerson, R.B., 1981. "Optimal auction design", Mathematics of Operations Research, Vol.6, pp.58-73,
- Palfrey, T. R., Pevnitskaya, S., 2008. "Endogenous entry and self-selection in private value auctions: an experimental study", Journal of Economic Behavior & Organization, Vol.66, pp.731-747,
- Riley, J.G., Samuelson, W.F., 1981. "Optimal auctions", American Economic Review, Vol.71, pp.381-392
- Samuelson, W., 1985. "Competitive bidding with entry cost", Economics Letters, Vol.17, pp.53-57, http://dx.doi.org/10.1016/0165-1765(85)90126-0
- Vickrey W., 1961. "Counterspeculation, auctions, and competitive sealed tenders", Journal of Finance, Vol.16, No.1, pp.8-37, http://dx.doi.org/10.1111/j.1540-6261.1961.tb02789.x
Publication order reference