Mergers in Sealed vs. Oral Auctions
نویسندگان
چکیده
In this paper, we study mergers in oral or second-price auctions and compare them to mergers in sealed-bid or rst-price auctions. We use an adaptation of the logit qualitative choice model to characterize the underlying bidder value distributions. In second-price auctions, this model has a closed-form relationship between winning bids (prices) and the probabilities of winning (shares), and this relationship gives rise to a Her ndahl-like formula that predicts merger e ects. We compare mergers in second-price auctions to mergers in rst-price auctions. Despite their di erences, sealed-bid merger e ects are predicted by the oral Her ndahl-like formula. The source of this curious similarity is not apparent.
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