The Wait and See Option in Ascending Price Auctions
نویسندگان
چکیده
Ascending auctions offer agents the option to wait and see before deciding to drop out. We show that in contexts where as time proceeds agents get finer and finer estimates of their valuations, incentives to drop out at one’s expected valuation are weak: it is optimal for agents to wait and see. We first illustrate the claim in a private value setting. We next analyze an interdependent value setting in which this wait and see option results in imperfect information aggregation. We also analyze the implications of the wait and see strategy for the seller’s revenue.
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