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Revenue comparisons for auctions when bidders have arbitrary types
Theoretical Economics (2006)
  • Yeon-Koo Che, Columbia University
  • Ian Gale, Georgetown University
Abstract
This paper develops a methodology for characterizing expected revenue from auctions when bidders' types come from an arbitrary distribution. In particular, types may be multidimensional, and there may be mass points in the distribution. One application extends existing revenue equivalence results. Another application shows that first-price auctions yield higher expected revenue than second-price auctions when bidders are risk averse and face financial constraints. This revenue ranking extends to risk-averse bidders with general forms of non-expected utility preferences.
Keywords
  • auctions,
  • multidimensional types and atoms,
  • risk aversion,
  • Gateaux differentiable preferences.
Disciplines
Publication Date
September 21, 2006
Publisher Statement
Discussion Paper 0506-03
Citation Information
Yeon-Koo Che and Ian Gale. "Revenue comparisons for auctions when bidders have arbitrary types" Theoretical Economics Vol. 1 Iss. 1 (2006)
Available at: http://works.bepress.com/yeonkoo/9/