Implementing Optimal Outcome through Sequential Auctions

We study sequential auctions as optimal mechanisms in selling multiple heterogeneous items. We find that a sequence of arbitrary standard auctions, ordered in decreasing variation of buyers’ valuations, achieves full efficiency and constrained optimal revenue subject to (IC), (IR) and an all-sold condition. In addition, combined with optimal static reserve prices, any sequential l-th price auction with the same ordering achieves optimal revenue subject to (IC) and (IR). We also discuss bid disclosure, the seller’s commitment and comparisons with simultaneous auctions. Our key insight is that optimal sequential auctions are simple combinations of optimal static (standard) auctions with proper ordering