Auctions with Endogenous Selling
نویسندگان
چکیده
The seminal paper by Milgrom and Weber (1982) ranks the expected revenues of several auction mechanisms, taking the decision to sell as exogenous. We endogenize the sale decision. The owner decides whether or not to sell, trading off the conditional expected revenue against his own use value, and buyers take into account the information contained in the owner’s sale decision. We show that revenue ranking implies volume and welfare ranking under certain general conditions. We use this to show that, with affiliated signals, English auctions have larger expected price, volume, and welfare than secondprice auctions, which in turn have larger expected price, volume, and welfare than first-price auctions. JEL classification: D44, D82, G12, G14.
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