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

Hernando-Veciana, Ángel

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