Revenue from the Saints, the Showoffs, and the Predators: Comparisons of Auctions with Price-Preference Values
نویسندگان
چکیده
Traditional auction theory assumes that bidders possess values defined solely on the auctioned object. There may, however, be cases in which bidders possess preferences over the revenue achieved by the auctioneer. We present here a comprehensive framework of price preference valuations, unifying several phenomenon ranging from preference for charitable giving to shill bidding. We compare expected efficiency and revenue of first and second price auctions for some specific cases of key interest. We also incorporate heterogeneous bidder preferences and examine the effects of mis-specified beliefs and show that both are crucial for understanding these situations. JEL Codes: D44, D64
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