Auctions when bidders prepare by investing in ideas

We consider auction games where, prior to the auction, bidders spend resources to increase their valuations. The market game is solved by solving an equivalent auxiliary social choice problem. We show that standard auctions are fully efficient, whereas reserve price requirements entail a double inefficiency. Moreover, we explain how optimal auctions differ from the well-known static optimum, and sketch the impact of information spillovers.

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Year of publication:	1999
Authors:	Jeitschko, Thomas D. ; Wolfstetter, Elmar
Institutions:	Sonderforschungsbereich 373, Quantifikation und Simulation ökonomischer Prozesse, Wirtschaftswissenschaftliche Fakultät
Subject:	auctions \| procurement

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Extent:	application/pdf
Series:	SFB 373 Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 2000,18
Classification:	D44 - Auctions
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010956380