Article ID Journal Published Year Pages File Type
957255 Journal of Economic Theory 2011 12 Pages PDF
Abstract

We study a symmetric independent private values auction model where the revenue-maximizing seller faces a cost cncn of attracting n bidders to the auction. If the distribution of valuations possesses an increasing failure rate (IFR), the seller overinvests in attracting bidders compared to the social optimum. Conversely, if the distribution is DFR, the seller underinvests compared to the social optimum. If the distribution of valuations becomes more dispersed, both, a revenue- and a welfare-maximizing seller, attract more bidders.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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