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Why every Economist should Learn some Auction Theory

Klemperer, Paul - C.E.P.R. Discussion Papers - 2000

in Seattle in August 2000. We discuss the strong connections between auction theory and 'standard' economic theory, and … argue that auction-theoretic tools and intuitions can provide useful argument and insights in a broad range of mainstream …

Persistent link: https://www.econbiz.de/10005792157

Almost Common Value Auctions: The 'Wallet Game' and its Applications to Takeover Battles and Airwaves Auctions

Klemperer, Paul - C.E.P.R. Discussion Papers - 1997

We use a classroom game, the ‘Wallet Game’, to show that in standard ascending, i.e. English, auctions of close-to-common-values objects, even slight asymmetries between bidders can have very large effects on prices. Examples of small asymmetries are a small value advantage for one bidder or...

Persistent link: https://www.econbiz.de/10005791269

Precautionary Bidding in Auctions

Esö, Péter; White, Lucy - C.E.P.R. Discussion Papers - 2003

We analyse bidding behaviour in auctions when risk-averse buyers bid for a good whose value is risky. We show that when risk in the valuations increases, DARA bidders will reduce their bids by more than the appropriate increase in the risk premium. Ceteris paribus, buyers will be better off...

Persistent link: https://www.econbiz.de/10005114473

Empirical Analysis of Limit Order Markets

Hollifield, Burton; Miller, Robert; Sandås, Patrik - C.E.P.R. Discussion Papers - 2001

We analyse order placement strategies in a limit order market, using data on the order flow from the Stockholm Stock Exchange. Traders submitting market or limit orders trade off the order price against both the execution probability and the winner’s curse risk associated with different order...

Persistent link: https://www.econbiz.de/10005789036

Information Structures in Optimal Auctions

Bergemann, Dirk; Pesendorfer, Martin - C.E.P.R. Discussion Papers - 2001

whom to sell at what price. We establish that optimal information structures in an optimal auction exhibit a number of …

Persistent link: https://www.econbiz.de/10005067488

Optimal Privatization Using Qualifying Auctions

Boone, Jan; Goeree, Jacob K. - C.E.P.R. Discussion Papers - 2005

implemented via a simple two-stage ‘qualifying auction.’ In the first stage of the qualifying auction, non-binding bids are … submitted to determine who enters the second stage, which consists of a standard second-price auction augmented with a reserve …

Persistent link: https://www.econbiz.de/10005497839

Second-price common value auctions with uncertainty, private and public information: experimental evidence

Brocas, Isabelle; Carrillo, Juan D; Castro, Manuel - C.E.P.R. Discussion Papers - 2015

We conduct a laboratory experiment of second-price sealed bid auctions of a common value good with two bidders. Bidders face three different types of information: common uncertainty (unknown information), private information (known by one bidder) and public information (known by both bidders),...

Persistent link: https://www.econbiz.de/10011165658

Toeholds and Takeovers

Bulow, Jeremy I.; Huang, Ming; Klemperer, Paul - C.E.P.R. Discussion Papers - 1996

Part ownership of a takeover target can help a bidder win a takeover auction, often at a low price. A bidder with a … ‘toehold’ bids aggressively in a standard ascending auction because its offers are both bids for the remaining shares and asks … large in a common value auction. When a firm bids more aggressively, its competitors face an increased winner’s curse and …

Persistent link: https://www.econbiz.de/10005136550

The nature of information and its effect on bidding behavior: laboratory evidence in a common value auction

Brocas, Isabelle; Carrillo, Juan D; Castro, Manuel - C.E.P.R. Discussion Papers - 2010

We study in the laboratory a series of first price sealed bid auctions of a common value good. Bidders face three types of information: private information, public information and common uncertainty. Auctions are characterized by the relative size of these three information components. According...

Persistent link: https://www.econbiz.de/10008468529

The Winner's Curse and the Failure of the Law of Demand

Bulow, Jeremy I.; Klemperer, Paul - C.E.P.R. Discussion Papers - 1997

We usually assume increases in supply, allocation by rationing, and exclusion of potential buyers will never raise prices. But all of these activities raise the expected price in an important set of cases when common-value assets are sold. Furthermore, when we make the assumptions needed to rule...

Persistent link: https://www.econbiz.de/10005114197