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On the Sub-optimality of Entry Fees in Auctions With Entry

Hernando-Veciana, Ángel

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Abstract

We study a variation of Myerson’s (1981) model in which we allow for uncertainty about the number of bidders. In our set-up, an appropriate reserve price in a standard auction maximizes the auctioneer’s expected revenue. However, entry fees can be optimal only under some special conditions. Basically, there must be some homogeneity in bidders’ beliefs about the number of bidders and the auctioneer must know, to some extent, these beliefs.

Citation

Hernando-Veciana, Á. (2006). On the Sub-optimality of Entry Fees in Auctions With Entry. Review of Economic Design, 10(1), 53-61. https://doi.org/10.1007/s10058-006-0001-4

Journal Article Type Article
Acceptance Date Mar 30, 2006
Online Publication Date Jun 23, 2006
Publication Date Apr 1, 2006
Deposit Date Jun 15, 2018
Publicly Available Date Jul 2, 2018
Journal Review of Economic Design
Print ISSN 1434-4742
Electronic ISSN 1434-4750
Publisher Springer
Peer Reviewed Peer Reviewed
Volume 10
Issue 1
Pages 53-61
DOI https://doi.org/10.1007/s10058-006-0001-4
Public URL https://durham-repository.worktribe.com/output/1356837

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