In many auction settings, there is favoritism: the seller's welfare depends positively on the utility of a subset of potential bidders. However, laws or regulations may not allow the seller to discriminate among bidders. We find the optimal nondiscriminatory auction in a private value,...

We show that, under independent private values, no mechanism that contains a right-of-first-refusal clause can maximize the sum of the utilities of the seller and the right-holder.

We show that, under independent private values, no mechanism that contains a right-of-first-refusal clause can maximize the sum of the utilities of the seller and the right-holder.