Asymptotic revenue equivalence of asymmetric auctions with interdependent values Academic Article uri icon

abstract

  • A seller wishing to sell an object through an auction can choose from various auction mechanisms (first-price, second-price, English, etc.). A key criterion in the selection of an auction mechanism is the expected revenue for the seller (ie, its revenue ranking). Myerson (1981) and Riley and Samuelson (1981) showed that all standard 1 symmetric private-value auctions with risk-neutral bidders in which bidders' values are independently distributed are revenue equivalent. 2 Bulow and Klemperer (1996) generalized this result to the case of symmetric auctions with interdependent values, in which bidders signals are independently distributed. 3 It is well known, however, that in most cases standard auctions are not revenue equivalent when bidders are asymmetric (see, Krishna (2002)). 4 Such an asymmetry can arise in auctions with interdependent values, either when bidders have asymmetric distributions of signals or when bidders …

publication date

  • January 1, 2010