Auctions with heterogeneous entry costs
نویسندگان
چکیده
If bidders have independent private values and homogeneous entry costs, a firstor secondprice auction with a reserve price equal to the seller’s value maximizes social surplus and seller revenue. We show that if entry costs are heterogeneous and private information, then the revenuemaximizing reserve price is above the seller’s value, a positive admission fee (and a reserve price equal to the seller’s value) generates more revenue, and an entry cap combined with an admission fee generates even more revenue. Social surplus and seller revenue may either increase or decrease in the number of bidders, but they coincide asymptotically.
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